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The headline German IFO business climate index came in at 97.9 in May, weaker than last month’s 99.2 and also missing consensus estimates pointing to a reading of 99.1. Meanwhile, the current economic assessment also missed estimates by a big margin and arrived at 100.6 points in the reported month as compared to last month’s 103.4 and 103.5 anticipated.

On the other hand, the IFO Expectations Index – indicating firms’ projections for the next six months,  came in at 95.3 for May, matching previous months reading and better than market expectations of 95.0.

The headline IFO business climate index was rebased and recalibrated in April after the IFO research Institute changed series from the base year of 2000 to the base year of 2005 as of May 2011 and then changed series to include services as of April 2018. The survey now includes 9,000 monthly survey responses from firms in the manufacturing, service sector, trade and construction.

The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).