- Commerzbank AG
German business confidence strengthened for the first time in four months, in a sign that domestic demand is shielding German companies from sluggish global growth. The Ifo institute's business climate index climbed to 106.7 in March, up from 105.7 in the preceding month. German businesses have increased their dependence on domestic demand as a China-driven downturn in emerging markets curtails exports. At the same time, the ZEW Center for European Research in Mannheim reported its index of investor expectations, which aims to predict economic developments in the coming six months, surged to 4.3 in March from 1 in the previous month. The gauge rebounded from a 16-month low after market turmoil calmed and the European Central Bank launched fresh monetary stimulus.
However, a separate report showed German manufacturing increased at the slowest pace in 16 months in March. Markit's manufacturing PMI declined to 50.4 from 50.5 in February, a sign that the Euro zone's powerhouse is feeling pressure of weakening global demand. The Bundesbank said that Europe's largest economy will probably maintain its "solid rate of expansion" this quarter, but there may be a slowdown in the next three months.
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