Germany: IFO Business Climate improves to 98.9 in February vs. 96.5 expected

• German IFO Business Climate Index continued to improve in February.
• IFO notes the Ukraine conflict remains a risk factor.
• EUR/USD trades in the positive territory above 1.1320.

The headline German IFO Business Climate Index improved to 98.9 in February from 96 (revised from 95.7 in January). This reading came in higher than the market expectation of 96.5.

Further details of the report showed that the Current Assessment Index rose to 98.6 from 96.2 and the Expectations Index advanced to 99.2 from 95.8. Both of these prints surpassed analysts' estimates.

Additional takeaways from the publication

"Current IFO index results not influenced by Current situation in Ukraine."

"German economy is expecting an end to the coronavirus crisis; the situation in Ukraine however remains a risk factor."

"Rising energy prices as a result of the crisis in Ukraine will certainly be a drag on businesses."

"Mood in manufacturing sectors improved significantly but bottlenecks continue to be a problem."

"Uncertainty to increase dramatically, Ukraine conflict may escalate further."

"Mood has improved in retail but bottlenecks are still a problem.

Market reaction

The EUR/USD edged higher on the upbeat data and was last seen rising 0.15% on the day at 1.1325.