BREAKING: EUR muted after IFO data

German IFO Institute released the latest set of its sentiment indices today at 9:00 pm BST. Data for August was expected to show a drop from 87 to 86 in the headline Business Climate index, with both subindices - Current Conditions and Expectations - declining.

Actual report turned out to be a turned out to be a positive surprise, with the headline Business Climate index coming in at 86.6. This is a smaller drop than expected, but still a drop. Beat was driven by Expectations subindex ticking lower from 86.9 to 86.8, instead of dropping to 85.8 as was expected. Current Conditions index matched expectations and dropped from 87.1 to 86.5.

Market reaction was muted, with no major moves being spotted on EUR or European indices. EURUSD ticked lower, but scale of the move was barely noticeable. DE40 also ticked lower, but has since recovered and is now trading flat compared to pre-release levels.

Germany, IFO indices for August

• Business Climate: 86.6 vs 86.0 expected (87.0 previously)
• Current Conditions: 86.5 vs 86.5 expected (87.1 previously)
• Expectations: 86.8 vs 85.8 expected (86.9 previously)

Source: xStation5