Trading The German IFO Business Climate Index

Germany's economic health is paramount to the eurozone as Germany is described as the work horse of the EU economy. The index is a monthly economic report that is issued in Germany toward the end of the month. The IFO surveys over 7,000 companies in Germany to obtain their opinion of the current business situation. The index measures the changes in business confidence and is an early indicator for economic development in Germany. It shows whether business spending and capital investment is likely to increase or decrease. The indicator is a leading indicator of future business activity, however it asks respondents about expected business activities, which may not actually occur.

By Barry Norman, Investors Trading Academy.