While the global economy was pretty weak before the coronavirus and still weakening, the lock-downs gave it a last blow, sending all sectors in deep recession all over the world. But, the global economy has been recovering since May, although the recovery seems to have run its course for now, because it is cooling off almost everywhere, as Friday’s services and manufacturing reports from the Eurozone showed for August, apart from the US reports, which showed a further jump in activity.

The German Ifo business climate indicator today’s shows an improvement for this month which is positive. EUR/USD has been bullish in the last few sessions, but it is turning lower now, despite the better Ifo report.

August German Ifo Business Climate

• August Ifo business climate index 92.6 vs 92.1 expected
• July Ifo business climate index  90.5; revised to 90.4
• Expectations August 97.5 vs 98.0 expected
• Prior expectations 97.0; revised to 96.7
• Current assessment 87.9 vs 86.2 expected
• Prior current assesment 84.5

Slight delay in the release by the source. Business morale showed an improvement across all areas, as economic sentiment continues to pick up in August. The positive news is that the current assessment also shows further improvement while expectations/outlook is also keeping elevated for now. This is keeping the optimism flowing still on a continued recovery and won’t do much harm to the current risk mood.