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GfK Consumer Climate for Germany Stable at 10.1

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Positive income expectations offset weak economic forecasts

The GfK Consumer Climate study for Germany, Europe’s powerhouse, remained stable in July at 10.1, which was in line with forecasts. The level was supported by improved income expectations, balancing the trade-off against weakening economic expectations. These expectations were affected by a struggle to find an outcome to the Greek crisis, even though Greece has avoided bankruptcy for now.

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Record-breaking run for income expectations, willingness to buy drops

Although economic expectations are still in the positive range, they dropped to a value of 18.4 points in July.

Income continued its record-breaking run to reach 58.6 points, exceeding the highest level reached in the previous month. A positive employment environment has opened the door for further wage increases in the future. Willingness to buy moderately dropped and currently stands at 55.4 points.

Impact on the market

The iShares Currency Hedged MSCI Germany ETF (HEWG) dropped 0.46%. The iShares MSCI Germany ETF (EWG), which fell 0.07%, took a similar course, although less compounded.

In terms of American depositary receipts trading on US exchanges, Deutsche Bank (DB) rose 2.93%, while Alcatel-Lucent (ALU) rose 4.79%. Software company SAP SE (SAP), however, fell 0.61%.

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