German business confidence holds up in July

Business in confidence in Germany held up in July better than was expected by analysts, according to the most widely followed gauge.

The IFO institute's business confidence index for that month printed at 108.0, well ahead of the previous month's reading of 107.4 points, coming in ahead of economists' forecasts of 107.2

A gauge tracking how companies evaluate current conditions jumped to 113.9 from 113.1 (consensus: 112.9).

However, a sub-index measuring German corporates ' expectations slipped to 101.4 from 102.0 in June (consensus: 101.8).

"The improvement in the Ifo index contrasts with the weakness seen in the ZEW and PMI surveys in July. The Ifo is more sensitive to sentiment than the PMIs or the ZEW. It is a sentiment survey, whereas the PMI is meant to measure actual activity and the ZEW surveys financial-market participants, who are likely to be more influenced by volatility in asset prices," said Gizem Kara, Senior European economist at BNP Paribas.

"Overall, the situation in Greece seems to have had less of an impact on Ifo, which might reflect the fact that a deal in principle was struck between Greece and its creditors in mid-July, helping to improve confidence."