German Business Climate Hits Record as Economy Proves Robust
German companies are gearing up for a bumper season after the summer lull. The business climate in Europe’s largest economy improved for a sixth month in July, according to Munich-based Ifo institute. The index, based on a survey of 7,000 German companies from manufacturing, trade and construction, rose to 116.0 from a revised 115.2 in June. That’s the highest level since 1991 and compares with a median estimate in a Bloomberg survey for a drop to 114.9. The euro rose after the report and traded at $1.1660 at 10:24 a.m. Frankfurt time. Ebullient sentiment suggests the German economy’s very strong performance at the start of the year is set to spill over into the second half. Steadily declining unemployment has been supporting domestic demand and the Bundesbank predicts that “lively” export demand will turn manufacturing into a leading growth driver. “Sentiment among German businesses is euphoric,” Ifo President Clemens Fuest said in a statement. “Germany’s economy is powering ahead.”
China’s second-half GDP growth seen at around 6.7 percent: official think tank
China’s economy is likely to grow at an annual rate of around 6.7 percent in the second half of 2017, slowing slightly from the first half of the year, the State Information Center (SIC) said on Tuesday. The State Information Center is an official think tank affiliated with the National Development and Reform Commission, the country’s top economic planning agency. It forecast full-year growth in the world’s second largest economy of around 6.8 percent, it was reported as saying by the the state-owned China Securities Journal. The SIC said the small decline would reflect a number of factors including a slowdown in export growth and a cooling of investment in the real estate market. “The emerging service industry will maintain good growth momentum,” said the SIC. China’s economy grew 6.9 percent in the second quarter from a year earlier, slightly faster than expected, supported by a government infrastructure spending spree and a red-hot housing market.
FOREX-Dollar struggles near 13-month low as U.S. political woes weigh
The dollar struggled near a 13-month low against a basket of major currencies on Monday as U.S. political woes dampened hopes for quick passage of President Donald Trump’s stimulus and tax reform agendas. The Trump administration, already dogged by investigations into alleged Russian meddling in the U.S. election, took a fresh hit on Friday after White House spokesman Sean Spicer resigned, highlighting an upheaval within the president’s inner circle. The dollar index against a group of six currencies was little changed at 93.854, after touching 93.847, its lowest since June 2016. “For any chance of the dollar bouncing back in the near term, it will need a rebound in U.S. yields,” said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo. “The current U.S. political situation is weighing heavily on U.S. yields. So we will need strong U.S. data to dislodge U.S. yields from their low levels.” The benchmark 10-year U.S. Treasury note yield hit a three-week low on Friday with a retreat in Wall Street shares kindling safe-haven demand for debt.