According to analysts at Danske Bank, the German IFO-indicator will give more clues to whether the German business cycle is bottoming out.

“The expectations index has improved in recent months and the December German ZEW index jumped higher. However, Flash PMI for December disappointed a bit so the signals are mixed. We also have a couple of inflation prints out from the UK and the euro area (final number). The Flash release for euro CPI showed a rise in core CPI from 1.1% y/y to 1.3% y/y but this was mostly due to transitory effects from prices on German package tours. We will get more details in the final release for inflation. We believe core inflation will fall back again in December when the effect from package tours is likely to drop out. UK core inflation is expected by consensus to be flat at 1.7% y/y. Overnight Bank of Japan will meet but no change is expected. We expect the BoJ to keep the current QQE with yield-curve control framework in place and Governor Haruhiko Kuroda to iterate his commitment to ease without hesitation if inflation momentum is lost.”