Take aways:

• Some very gloomy signs in the IFO survey details with Capital Goods production expectations nose-diving in a recessionary fashion
• On the other hand, the highly cyclical Chemicals industry, a large consumer of Natural Gas, is rebounding for the third month running. 
• Price pressures remain low in the forward looking survey, but there are signs of a stabilization/rebound. EUR-flation is likely to bottom below 2%, but price pressures could re-emerge already during the spring according to the Ifo Survey. 

Yesterday, we got the full Ifo report from Germany and thus we refreshed our models and quietly wanted to highlight what we found were the most important numbers. We start by looking at inflation where price expectations in manufacturing bottomed out and with its 5-6 months lead it looks like inflation will turn around somewhere late spring early summer next year. Noticeably, it has bottomed out at around 1.5-2%.

Chart 1: Late spring early summer and the bottom in disinflation is in?