May business confidence indices released today in
Germany and France came out better than expected, signaling that the two major
Euro zone economies could improve in the next 2/3 months.
In Germany, IFO business confidence index jumped from 104.4 to
105.7 against economists’ expectations for a data almost unchanged at 104.5. The sub-index measuring current business jumped to 110.0
points in May from 107.2 points in April. And the outlook sub-index was
unchanged at 101.6 points. The data is in line with an acceleration of industrial
production in the next 2/3 months.
In France, INSEE business confidence index jumped from 88 to 92,
better than market expectations at 90. The figure is in line with an
improvement of industrial sector outlook despite remaining below long term
average and at a value in line with 0.6% y/y contraction of French industrial
production in the next 2/3 months.
Italian consumer confidence index fell from 86.3 to
85.9. The index is now close to the historical low at 84.7 recorded in January
due to high unemployment rate. In this scenario, consumer spending could
continue contracting in the months ahead.
