France’s business climate improved to an index reading of 110 in November from 108 in October. The gain, like the rise in the German IFO index was unexpected. Still the index has moderated as the level reading has flattened out and the percentage gain reading shows a slowdown is still in effect. The climate index sits firmly at the 74th percentile mark of its range. The production trends and likely trend readings are also firm in their ranges in their 59th and 79th range percentiles, respectively. Orders are in about the same relative standing in the 74th percentile of their range and foreign orders are in the 69th percentile of their range..

The bounce in the French and German industrial sentiment gauges in November is curious especially as the euro moves higher and there have been concerns voiced of what a strong euro might do to growth. Still the rises in these two industrial gauges were small and they have not reversed the trends to weaker readings that had been in force. A stronger exchange rate is a good thing in many respects since it increases purchasing power and helps to fight off inflation. But so far in EMU the inflation numbers have stayed troublesome and even gotten worse, at least they have for Germany.