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Optimism in Europe? Early indicators point to an upswing!
Learn how leading indicators and trade deals influence optimism in the European economy. Important dates are coming!
Optimism in Europe? Early indicators point to an upswing!
The economic mood in Europe could soon improve. Early indicators suggest that consumer confidence and economic conditions could turn positive. Robert Greil, chief strategist at Merck Finck, sees optimistic signs, which are primarily supported by the de-escalation of trade conflicts by the US administration. Nevertheless, he warns: Hard economic data could quickly dampen these hopes.
Crucial data releases are coming in the near future that will provide additional insights. Chinese retail sales and industrial production for April are scheduled for Monday, followed by a summit between Britain and the EU on Brexit cooperation. Another important date is Tuesday, when consumer confidence for May in the Eurozone will be announced.
Important data in focus
On Thursday, May 22nd, the preliminary purchasing managers' indices and the Ifo business climate for May will be presented. The ifo business climate is a central indicator of economic development in Germany and has established itself as a reliable leading indicator. Various scientific analyzes support the forecasting ability of the indicator, such as the work of Lehmann and Wohlrabe, which shed more light on the interpretation and significance of the ifo business climate.
Greil highlights that the strategic trade deals within the established 90-day deferral periods are of great importance. Negative surprises in upcoming economic statistics could severely impact both investor confidence and the economic recovery.
The impact on the markets
The picture for the markets could therefore change quickly. There is both reason for optimism and concern regarding the upcoming data, particularly the Ifo business climate. The following table provides an overview of the upcoming dates:
| Date | publication |
|---|---|
| Monday | Chinese retail sales and industrial production for April |
| Monday | Summit between Great Britain and the EU on Brexit cooperation |
| Wednesday | Eurozone consumer confidence for May |
| Thursday | Preliminary purchasing managers' indices and Ifo business climate for May |
| Wednesday | UK inflation data for April |
| Friday | GfK May Consumer Confidence and April UK Retail Sales |
| Friday | Final German gross domestic product for the first quarter and Japan's inflation figures for April |
The coming days promise a lot of movement and potential opportunities for investors and economists. The focus is particularly on the Ifo business climate, which could provide valuable information on future economic development, while on the other hand, the risks should not be lost sight of. In its survey, the ifo Institute assigns a central role to various aspects of the business climate and will continue to be a focus of market observations. Further information can be found at ifo.de and Focus.