- Jens-Oliver Niklasch, a fixed-income strategist at Landesbank Baden-Wuerttemberg
German business morale unexpectedly improved in November, suggesting the Euro zone's number one economy is gradually regaining its footing after struggling to grow in recent months. According to the Ifo Institute, the headline Business Climate Index, based on a survey of 7,000 executives, climbed to 104.7 compared with 103.2 a month earlier. The Current Assessment sub-index came in at 110 points following the previous month's reading of 108.4. In addition to that, the Ifo Expectations Index, indicating companies' projections for the next six months, rose to 99.7 up from 98.3 in October. The report suggested that an easing of geopolitical tensions in Ukraine and other parts of the world, which affected sentiment in the summer and early autumn, would help to boost German exports and investment.
Meanwhile, ECB policy maker Ewald Nowotny said that the first quarter of 2015 would be too early for the central bank to take further steps to fuel the Euro bloc's economy. Nowotny also praised the latest extraordinary measures by the ECB, including rate cuts, ABS purchases and TLTROs, and noted that it would take some time for them to materialize in the real economy. The next official meeting of ECB is due to take place on December 4, with the central bank expected to keep rates unchanged and maintain its dovish tone.
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