German business morale improves unexpectedly in October

German business sentiment improved unexpectedly in October, reaching its highest since April 2014, a private survey showed on Tuesday. According to the Munich-based Ifo Institute, the Business Climate Index, which is based on a monthly survey of some 7,000 firms, jumped to 110.5 points on a monthly seasonally adjusted basis in October, following the preceding month's 109.5 and surpassing the 109.6 market forecast. The increase in the headline Index was mainly driven by the sentiment improvement in the manufacturing and construction sectors. According to the Ifo's sub-survey, the Current Assessment Index, which measures current conditions in the Euro zone's largest economy, came in at 115.0 in October, up from September's 114.7 points, whereas analysts anticipated a slight increase to 114.9. Furthermore, the Business Expectations Index, which indicates companies' outlook for the next six months, advanced to 106.1 in the same month, compared to the previous month's 104.5 and forecasts for a reading of 104.5 points. The German economy is widely expected to lose some of its steam in the Q3, after growing 0.7% in the Q1 and 0.4% in the Q2. The Euro rose against the US Dollar to 1.0880 from 1.0875 ahead of the release.