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.