Something's In The Offing

reading the economics headlines in the press today, it isn't hard to seeing that some parts of the global system are creaking at the seams. Latest items on this front are the results of todays Ifo survey in Germany and the drop in Italy's Isae institute confidence index. This Isae reading is the lowest in three and a half years.

The Ifo Business Climate index for German industry and trade declined in May, after already having fallen three times in succession in the preceding months. The surveyed firms again reported less favourable business expectations for the coming six months. Appraisals of the current situation have stabilised, however. Inflation pressure has further declined. An improvement in the economic situation in the next months is not to be expected.

The Rome-based Isae institute's confidence index today fell to 84.2, the lowest since November 2001, from a revised 84.8 in April, matching the median forecast of 21 economists surveyed by Bloomberg. For the report, Isae interviewed 4,100 manufacturers between May 1 and May 18.