HomeContributorsFundamental AnalysisGerman IFO Survey Falls For The 6th Straight Month

German IFO Survey Falls For The 6th Straight Month


  • UK Nov Retail Sales beat consensus aid by Black Friday discounts bringing consumers back into shops.
  • German Dec IFO Survey registered its 6th straight monthly decline (Business Climate Survey: 94.7 v 95.3e).
  • German Bundesbank Semi-annual economic forecasts put its inflation above the ECB target for for 2023 and 2024.
  • ECB’s Villeroy noted that the region was not coming back to the pre-Covid regime of very weak inflation.


  • BOJ left Interest Rate on Excess Reserves (IOER) unchanged at -0.10% and maintain 10-year Yield Target (YCC): at 0.00% (as expected); BOJ noted it would end their purchases of corporate bonds and commercial paper at the end of March (as scheduled) To also reduce the 1-year interest-free loans to banks aiding pandemic-hit businesses (ending those for large corporations at the end of March, while extending those for small businesses by six months).


  • President Biden stated that the US was looking at a winter of severe illness and death for people who were unvaccinated; Omicron variant was here and would begin spreading more rapidly.
  • France President Macron noted that would be assessing hospital capacity, not just case numbers, in making Covis-19 restriction decisions.


  • ECB members said to have disagreed on inflation outlook and some pointed to the upside risks to new forecast.
  • UK Brexit Min Frost to meet with EU’s Sefcovic on Friday (Dec 17th) and expected to drop the demand to remove the ECJ as the ultimate arbiter of trade rules in Northern Ireland.
  • UK Chancellor Sunak said to hold talks with business leaders about a new support package for the hospitality sector.
  • Liberal Democrats won the North Shropshire seat by defeating the UK Conservatives in special election.


  • US Senate passed a bill that would ban goods from China’s Xinjiang region unless companies prove they were not made with forced labor, the bill now goes to President Biden to sign.

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 -+0.55% at 473.96, FTSE +0.25% at 7,278.70, DAX -0.53% at 15,552.77, CAC-40 -0.55% at 6,966.82, IBEX-35 -0.57% at 8,332.87, FTSE MIB -0.80% at 26,567.00, SMI -0.55% at 12,719.95, S&P 500 Futures -0.17%].
  • Market Focal Points/Key Themes: European indices open modestly lower (FTSE notable exception following better retail sales data) and stayed under pressure as the session wore on; abatement in risk sentiment seen as a correction following performance yesterday; better performing sectors include real estate and utilities; while sectors leading to the downside include industrials and technology; EssilorLuxottica and GrandVision reach agreement to divest Vision stores; Johnson Matthey sells its health unit to Altaris; Stellantis enters agreements with three European banks for revamping its financial arm; reportedly Commerzbank to sell its Hungarian unit to ErsteBank; earnings expected in the upcoming US session include Winnebago and Darden Restaurants.


  • Consumer discretionary: Deutsche Post DHL [DPW.DE] -1% (Fedex earnings).
  • Financials: CNP Assurances [CNP.FR] +1% (stake sale), Permanent TSB Group Holdings [ILOA.IE] +4% (acquisition).
  • Healthcare: GENFIT [GNFT.FR] +45% (licensing agreement), DiaSorin [DIA.IT] -11% (strategic plan).


  • ECB’s Villeroy (France): reiterates Council that inflation hump lasting longer than expected but probably close to the peak. Not coming back to the pre-Covid regime of very weak inflation but similar to one seen before the financial crisis.
  • ECB’s Rehn (Finland stated that there was considerable uncertainty about the path which inflation would take.
  • ECB’s Weidmann (Germany) stated that ECB must not ignore upside risks to price growth.
  • ECB’s Simkus (Lithuania) stated that there was upside risks to inflation.
  • BOE’s Pill (chief economist) stated that inflation and rising wages were looking more persistent and that more rate hikes could come. Inflationary pressures needed to be addressed and saw the time had come to take away stimulus. BOE did signal back in Nov that rate hike could come due to tight labor market and added that be believed that labor market could tighten further.
  • German Bundesbank Semi-annual economic forecasts raised the 2022 CPI EU Harmonized (HICP) from 1.8% to 3.6% and also raised the 2023 inflation outlook from 1.7% to 2.2% (**Note: ECB Staff projections at 1.8%). Pandemic restrictions and supply bottlenecks to stall growth in both Q4 and Q1 but did see significant momentum in spring 2022.
  • German IFO Economists :noted that the retail sector was seeing an impact from the pandemic resulting in fewer shoppers.
  • Poland Central Bank member Kochalski stated MPC to rate rates by 50bps but in less frequency; not signaling FX intervention.
  • Hungary Central Bank member Kandracs: To continue with monthly rate hikes; will do what is needed to contain inflation.
  • Hungary Fin Min Varga stated that 2022 GDP growth seen around 5.0%; budget deficit to GDP ratio of 4.9%. To curb back on fiscal stimulus.
  • Sweden govt said to reintroduce some covid support measures for companies.
  • BOJ Gov Kuroda post rate decision press conference reiterated stance that would not hesitate to add to easing if necessary; uncertainties remained high over spread of Omicron virus variant. Weak JPY currency (Yen) had been positive for the economy so far; supports exports and corporate profits. Rate hikes by other G7 members would not necessary weaken the yen. BOJ would continue to act if Repo Rate jumped higher; spike was not desirable.

Currencies/Fixed Income

  • USD was steady after some softness exhibited since the FOMC decision mid-week. Dealers noted that interest-rate differentials were moving further in greenback’s favor and the dollar should remain firm in the coming weeks.
  • GBP/USD around 1.3330 area and holding onto the bulk of the post BOE rate hike gains. BOE was expected to continue with rate hikes at the Feb meeting (market see 3 rate hikes in 2022).
  • EUR/USD holding above the 1.1330 area after dealers noted that the ECB was not as dovish as anticipated at yesterday’s meeting.
  • TRY currency (Lira) weakened to fresh record lows asapproached the 17.00 agaisnt the USD.

Economic data

  • (EU) EU27 Nov New Car Registrations: -20.5% v -30.3% prior.
  • (DE) Germany Nov PPI M/M: 0.8% v 1.4%e; Y/Y: 19.2% v 20.0%e.
  • (UK) Nov Retail Sales (ex-auto/fuel) M/M: 1.1% v 0.8%e; Y/Y: 2.7% v 2.3%e.
  • (UK) Nov Retail Sales (including auto/fuel) M/M: 1.4% v 0.8%e; Y/Y: 4.7% v 4.2%e.
  • (CN) Weekly Shanghai copper inventories (SHFE):34.6K v 41.4K tons prior.
  • (AT) Austria Nov Final CPI M/M: 0.7% v 0.7% prelim; Y/Y: 4.3% v 4.3% prelim.
  • (ES) Spain Q3 Labour Costs Y/Y: 4.9% v 13.2% prior.
  • (RU) Russia Narrow Money Supply w/e Dec 10th (RUB): 14.31 v 14.23T prior.
  • (ES) Spain Oct Trade Balance: -€3.4B v -€2.4B prior.
  • (DE) Germany Dec IFO Business Climate Survey: 94.7 v 95.3e (6th straight monthly decline); Current Assessment Survey: 96.9 v 97.5e; Expectations Survey: 92.6 v 93.6e.
  • (NO) Norway Dec Unemployment Rate: 2.2% v 2.2%e.
  • (PL) Poland Nov Employment M/M: 0.2% v 0.1%e; Y/Y: 0.7% v 0.5%e.
  • (PL) Poland Nov Average Gross Wages M/M: 1.8% v 0.9%e; Y/Y: 9.8% v 8.9%e.
  • (EU) Euro Zone Nov Final CPI Y/Y: 4.9% v 4.9% advance; CPI Core Y/Y: 2.6% v 2.5% advance.
  • (EU) Euro Zone Oct Construction Output M/M: 1.6% v 1.0% prior; Y/Y: % v 2.0% prior.

Fixed income Issuance

  • (IN) India sold total INR240B vs. INR240B indicated in 2031, 2034 and 2061 bonds.
  • (ZA) South Africa sold total ZAR1.2B vs. ZAR1.2B indicated in I/L 2033, 2046 and 2050 Bonds.

Looking ahead

  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (RU) Russia Central Bank (CBR) Interest Rate Decision: Expected to raise Key 1-Week Auction Rate by 100bps to 8.50%.
  • 06:00 (BE) Belgium Debt Agency (BDA) to sell OLOBonds.
  • 06:00 (UK) DMO to sell £2.0B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.0B respectively).
  • 06:30 (IN) India Weekly Forex Reserve w/e Dec 10th: No est v $635.9B prior.
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (IN) India announces upcoming bill issuance (held on Wed).
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:30 (CA) Canada Oct Int’l Securities Transactions (CAD): No est v 20.0B prior.
  • 10:00 (MX) Mexico Central Bank Economist Survey.
  • 11:00 (CO) Colombia Oct Economic Activity Index (Monthly GDP) Y/Y: 10.5%e v 12.9% prior.
  • 11:00 (EU) Potential sovereign ratings after European close )Moody’s on Luxembourg and Slovakia sovereign ratings).
  • 13:00 (CO) Colombia Central Bank Interest Rate Decision: expected to raise Overnight Lending Rate by 50bps to 3.00%.
  • 13:00 (US) Fed’s Waller.
  • 13:00 (US) Weekly Baker Hughes Rig Count.


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