HomeContributorsFundamental AnalysisGerman IFO Survey Falls For The 5th Straight Month

German IFO Survey Falls For The 5th Straight Month


  • Scholz poised to become the next German Chancellor as coalition deal said to be in place.
  • German IFO falls for the 5th straight month to lowest level since Feb.
  • Markets appear skeptical about effectiveness of joint oil reserve release.


  • RBNZ raised the Official Cash Rate (OCR) by 25bps to 0.75% (as expected); raised its rate path outlook.
  • RBNZ Gov Orr post rate decision comments noted that it did consider a 50bps rate hike amid a range of options. Added that the 25bps hike gave more optionality and the MPC could take its time at this point.
  • Japan Nov Preliminary Manufacturing PMI registered its 10th month of expansion and fastest pace since Jan 2018 (54.2 v 53.2 prior).
  • Japan Econ Min Yamagiwa stated that was watching all markets aspects carefully; FX prices moved on various factors.
  • Analysts noted that China PPI might have peaked on coal price decline (Note: China Oct PPI registered its highest pace since 1995 with Y/Y: 13.5% v 12.3%e).


  • BOE Gov Bailey noted that he did not believe MPC would go back to a hard form of guidance; Not off the table that we give no guidance at all on rates; Decisions being made meeting by meeting.
  • ECB’s De Guindos (Spain) noted that Inflation drivers were becoming more structural. Still believed that inflation rebound in recent months was of a transitory factors.
  • EU’s Sefcovic noted that EU-UK talks on Northern Ireland trade rules would ‘probably’ continue into next year.
  • EU said to be preparing new COVID-19 travel recommendations inside union called ‘Recommendation on free movement’; To be unveiled as soon as Nov 25th.


  • Weekly API Crude Oil Inventories: +2.3M v +0.7M prior.

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 -0.09% at 478.80, FTSE +0.09% at 7,272.96, DAX -0.40% at 15,873.19, CAC-40 -0.25% at 7,027.19, IBEX-35 -0.06% at 8,809.69, FTSE MIB +0.19% at 26,991.00 , SMI -0.02% at 12,364.13 , S&P 500 Futures -0.30%].

Market Focal Points/Key Themes:


  • European indices remainded under pressure and opened mostly in red with exception to FTSE 100 amid potential lockdown measures imposed by newly formed German govt; sectors among those trending lower are consumer discretionary and technology; elsewhere, Telecom Italia in Milan trades as much as 10% higher on press speulation that KKR may improve its offer for the company; cybersecurity firm Darktrace issued AGM and trades slightly lower in London; French company Elior provided its earnings report and CMD update trading higher 3% in Paris; expected during the upcoming US session include Deere & Company, Futu Hondings and Centogene.
  • Consumer discretionary: Elior Group [ELIOR.FR] +3% (earnings; targets), Mulberry [MUL.UK] +24% (earnings).
  • Consumer staples: Kerry Group [KYGA.UK] -5% (placement).
  • Healthcare: Santhera Pharmaceuticals [SANN.CH] -5% (seeks funding).
  • Technology: IQE [IQE.UK] -19% (trading update), Darktrace [DARK.UK] -1% (AGM statement).
  • Telecom: Telecom Italia [TIT.IT] +9% (KKR said to prepare raising offer).


  • ECB’s Holzmann (hawk, Austria) stated that inflation expectations had recently increased but not sure by how much exactly. Reiterates Council view that Inflation was largely transitory and to likely slow during 2022. To assess the inflation outlook at the Dec meeting and make decisions on tapering.
  • ECB’s Panetta (Italy; dove) noted that downside risks for EU economy might be growing; but should not be alarmed if saw signs of a one-off catch-up in wages in 2022. Reiterated stance that current inflation spike was purely a mixture of temporary factors. Forward guidance condition on rise in underlying inflation was not even close to being met. Premature tightening of policy could turn the supply shock into a prolong recession; needed to be patient.
  • ECB Vasle (Slovenia) reiterated Council view that inflation was more pronounced and the pickup was likely to last longer than previously anticipated.
  • German SPD, FDP and Greens parties said to present coalition deal as soon as today, Nov 24th. Scholz to become the next German Chancellor.
  • France Fin Min Le Maire stated that was not concerned about the impact of covid on the economic growth. Did not see the need for further restrictions to be imposed to curb the virus.
  • Italy govt said to be debating restrictions on unvaccinated people; Measures could be approved as soon as today, Nov 24th.
  • German IFO Economists stated that the latest decline in Survey was a cause for concern and saw no signs of any letup in bottlenecks. The latest covid outbreak was making the situation worse. Clear majority of companies to increase prices and it saw Q4 GDP stagnating.
  • Poland Central Bank (NBP) Gov Glapinski stated that future rate hikes to be data-dependent. Rate hikes should be favorable for the PLN currency (Zloty) and added that it could intervene in FX market.
  • Japan said to plan ¥22.1T of govt bond sale as part of economic stimulus and FY21 extra budget (**Reminder: On Nov 19th Japan Cabinet formally approved the ¥78.9T stimulus package which included fiscal spending of ~¥55.7T).
  • China Vice Commerce Min noted that it would introduce new round of measures to stabilize trade in due course.
  • China Foreign Min spokesperson Zhao Lijian reiterated stance that US should abide by the “One China” policy; firmly opposes the invitation of Taiwan to the Democracy Summit. Keeping close contact with those nations releasing oil reserves and producers; To release reserves according to its needs.
  • China Banking and Insurance Regulatory Commission (CBIRC) stated that the banking sector needed to step up internal controls to avert risks.

Currencies/Fixed Income

  • USD continued to find steady legs to hold onto recent gains.
  • EUR/USD hit fresh 16-month lows at 1.1210 area as German IFO fell for the 5th straight month to lowest level since Feb. Weakness also being attributed to speculation that the new German govt could announce a full lockdown to contain the virus. ECB speak continued to express hope that inflation was transitory but conceding it could take longer for CPI to move move than previously anticipated.
  • USD/JPY continued to probe the 115 handle.

Economic data

  • (FI) Finland Oct PPI M/M: 1.2% v 2.3% prior; Y/Y: 20.8% v 19.1% prior.
  • (TR) Turkey Nov Real Sector Confidence (seasonally adj): 112.0 v 111.3 prior; Real Sector Confidence NSA (unadj): 108.4 v 109.6 prior.
  • (TR) Turkey Nov Capacity Utilization: 78.1% v 78.0% prior.
  • (FR) France Nov Business Confidence: 114 v 112e; Manufacturing Confidence: 109 v 106e; Production Outlook Indicator: 20 v 18e; Own-Company Production Outlook: 20 v 16e.
  • (CZ) Czech Nov Consumer Confidence Index: -16.0 v -8.5 prior; Business Confidence: 8.4 v 6.7 prior; Composite Confidence (Consumer & Business Confidence): 3.5 v 3.6 prior.
  • (TW) Taiwan Oct M2 Money Supply Y/Y: 8.5% v 8.7% prior; M1 Money Supply Y/Y: 14.9% v 15.0% prior.
  • (DE) Germany Nov IFO Business Climate Survey: 96.5 v 96.7e (5th straight decline); Current Assessment Survey: 99.0 v 99.0e; Expectations Survey: 94.2 v 94.6e.
  • (CH) Swiss Nov Expectations Survey: -10.8 v +15.6 prior.
  • (ZA) South Africa BER Business Confidence: 43 v 43 prior.

Fixed income Issuance

  • (IN) India sold total INR vs. INR200B indicated in 3-month, 6-month and 12-month bills.
  • (SE) Sweden sold SEK7.5B vs. SEK7.5B indicated in 3-month Bills; Avg Yield: -0.5126% v -0.3643% prior; bid-to-cover: 5.90x v 2.74x prior.
  • (NO) Norway sold NOK2.0B vs. NOK2.0B indicated in 1.25% Sept 2031 Bonds; Avg Yield: 1.69% v 1.57% prior; bid-to-cover: 3.61x v 2.80x prior.

Looking ahead

  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (DE) Germany to sell €2.0B in 0% May 2036 Bunds.
  • 05:30 (EU) ECB 3-month LTRO Allotment.
  • 05:30 (HU) Hungary Debt Agency (AKK) switch auction.
  • 06:00 (UK) Nov CBI Industrial Trends Total Orders: 8e v 9 prior; Selling Prices: 57e v 59 prior.
  • 06:00 (BR) Brazil Nov FGV Consumer Confidence: No est v 76.3 prior.
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (RU) Russia OFZ Bond auction (if any).
  • 07:00 (US) MBA Mortgage Applications w/e Nov 19th: No est v -2.8% prior.
  • 07:00 (CL) Chile Oct PPI M/M: No est v -0.2% prior.
  • 07:00 (UK) Weekly PM Question time in House.
  • 08:00 (PL) Poland Oct M3 Money Supply M/M: 1.0%e v 0.6% prior; Y/Y: 8.4%e v 8.6% prior.
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:30 (US) Q3 Preliminary GDP Annualized (2nd reading) Q/Q: 2.2%e v 2.0% advance reading; Personal Consumption: 1.6%e v 1.6% advance reading.
  • 08:30 (US) Q3 Preliminary GDP Price Index: 5.7%e v 5.7% advance; Core PCE Q/Q: 4.5%e v 4.5% prior.
  • 08:30 (US) Oct Preliminary Durable Goods Orders: +0.2%e v -0.3% prior; Durables (ex-transportation): 0.5%e v 0.5% prior; Capital Goods Orders (non-defense/ex-aircraft): 0.5%e v 0.8% prior; Capital Goods Shipments (non-defense/ex-aircraft): 0.5%e v 1.4% prior.
  • 08:30 (US) Initial Jobless Claims: 260Ke v 268K prior; Continuing Claims: 2.03Me v 2.080M prior.
  • 08:30 (US) Oct Preliminary Wholesale Inventories M/M: 1.0%e v 1.4% prior; Retail Inventories M/M: +0.4%e v -0.2% prior.
  • 08:30 (US) Oct Advance Goods Trade Balance: -$95.0Be v -$96.3B prior.
  • 09:30 (UK) BOE’s Tenreyro.
  • 10:00 (US) Oct Personal Income: +0.2%e v -1.0% prior; Personal Spending: 1.0%e v 0.6% prior; Real Personal Spending (PCE): 0.6%e v 0.3% prior.
  • 10:00 (US) Oct PCE Deflator M/M: 0.7%e v 0.3% prior; Y/Y: 5.1%e v 4.4% prior.
  • 10:00 (US) Oct PCE Core Deflator M/M: 0.4%e v 0.2% prior; Y/Y: 4.1%e v 3.6% prior.
  • 10:00 (US) Nov Final University of Michigan Confidence: 67.0e v 66.8 prelim.
  • 10:00 (US) Oct New Home Sales: 800Ke v 800K prior.
  • 10:30 (US) Weekly DOE Oil Inventories.
  • 11:00 (RU) Russia Oct Industrial Production Y/Y: 5.8%e v 6.8% prior.
  • 11:00 (RU) Russia Oct PPI M/M: 1.1%e v -1.0% prior; Y/Y: 27.6%e v 26.3% prior.
  • 11:00 (DE) ECB’s Schnabel (Germany).
  • 12:00 (US) Weekly EIA Natural Gas Inventories.
  • 13:00 (US) Weekly Baker Hughes Rig Count.
  • 14:00 (US) FOMC Nov Minutes.
  • 16:45 (NZ) New Zealand Oct Trade Balance (NZD): No est v -2.2B prior; Exports: No est v 4.4B prior; Imports: No est v 6.6B prior.
  • 18:50 (JP) Japan Oct PPI Services Y/Y: 0.9%e v 0.9% prior.
  • 19:30 (AU) Australia Q3 Private Capital Expenditure: No est v 4.4% prior.
  • 20:00 (KR) Bank of Korea (BoK) Interest Rate Decision: Expected to raise 7-Day Repo Rate by 25bps to 1.00%.
  • 21:00 (SL) Sri Lanka Central Bank (CBSL) Interest Rate Decision: Expected to keep Key Rates unchanged; Standing Lending Rate at 6.00%; Standing Deposit Rate at 5.00%.
  • 22:35 (JP) Japan to sell 40-Year JGB Bonds.


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