German IFO Business Climate Drops to 84.4 in April, Deepening Recession Fears

The German IFO Business Climate index dropped to 84.4 in April (vs. 85.5 expected), signaling deeper recession risks for Europe’s largest economy and prompting immediate market reactions. The euro weakened — EURUSD fell about 0.3% from 1.0820 to 1.0785 — while German 10-year Bund yields slipped and the DAX opened down ~0.8%. Analysts flagged manufacturing weakness and weaker business expectations, increasing bets that the ECB may cut rates (markets price ~60% chance of a June cut). The report heightens downside risks to eurozone growth, pressuring euro-sensitive assets and cyclical equity sectors.