German business morale unexpectedly rises in November

The German IFO business climate index rose to 109.0 from 108.2 in October.

“The positive Ifo reading is a bit of a conundrum as it is not entirely matched by positive hard data”, ING Bank economist Carsten Brzeski said.

German business confidence unexpectedly rose in a sign that Europe’s largest economy is robust enough to weather risks including a global slowdown and Volkswagen AG’s emissions scandal.

McKeown also pointed out that about 80% of responses of the Ifo survey, which covers 7,000 firms, were taken before November 13. Hence, most of any impact from the Paris attacks has yet to come, she added.

Data published earlier Tuesday showed that the German economy slowed in the third quarter, as solid domestic consumption was countered by weak exports and slack corporate investment.

Figures released this morning confirmed a previous estimate that the German economy, the biggest in the Eurozone, grew 0.3 per cent in the three months to September (Q3). The U.S. Environmental Protection Agency and the California Air Resources Board are now probing Volkswagen, Audi and Porsche models with 3.0-liter diesel engines as far back as the 2009 model year, after initially focusing on newer versions.

Manufacturers will ramp up production in the months ahead and the mood among automotive companies increased despite the emission scandal at Volkswagen, Mr. Sinn said. The Ifo index of German business morale unexpectedly improved in November.