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Another month, another disappointment in German business confidence: the IFO  Business Climate fell to 103.2 points, significantly below expectations. The Expectations component also disappointed with 98.3 points. The third component, Current Assessment, also fell more than predicted, to 108.4 points.

On the other hand, Money  Supply rose by 2.5% y/y and private loans dropped 1.2% in the euro-zone. Both came out better than expected. EUR/USD dropped but then rose. The pair is struggling with 1.27.

The German IFO Business Climate was expected to tick down from 104.7 to 104.6 points in October. The Expectations  component was expected to slide fro 99.3 to 98.9 points. The  Current Assessment component carried expectations for a  drop to 110 from 110.5 in September.

EUR/USD traded just under 1.27 before the  publication, still enjoying the positive news from the stress tests.

At the same time, the ECB released some data for September: the M3 Money Supply was expected to advance to a y/y growth rate of 2.2% and private loans carried expectations for a slower drop of 1.3% y/y after 1.5% in August.

IFO is Germany’s No. 1  Think Tank, but the other important institute, ZEW, publishes its data earlier. ZEW’s business sentiment index went negative for October, reflecting pessimism. However, PMIs came out better than expected.

The stress tests showed a limited number of banks needed to cover  a shortfall. They were received as serious and credible. The euro started trading higher than its close on Friday.