German consumer climate improves heading into January on optimism over future income

Consumer climate in Germany improved, heading into January, following optimism over households’ future income, which suggested that consumer spending will continue to play a major role in the country’s growth prospects in the near term.

The consumer sentiment indicator, published by the Nuremberg-based GfK institute and based on a survey of around 2,000 Germans, rose to 9.9. This was the highest reading since October and in line with an average forecast in a Reuters poll.

The institute's gauge measuring income expectations jumped to 55.6 points, its highest level since August. A sub-index measuring overall economic expectations rose for the third consecutive month to its highest since June while willingness to buy edged down.

"If at all, there could be a dent in next month's survey, but I don't see a massive long-term impact. The excellent condition of the labour market is awakening hope that there will be sustained strong growth in wages. It appears as if consumers generally regard labour market conditions as playing the crucial role in their decision as to whether to make purchases," said Rolf Buerkl, Researcher, GfK.

Meanwhile, the EUR/USD traded at 1.04, up -0.02 percent, while at 8:00GMT, the FxWirePro's Hourly Euro Strength Index remained slightly bullish at 82.88 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex