Germany’s [B]IFO Business Climate[/B] indicator is expected to rise to 85.0 in June, the third consecutive improvement since the metric hit a record low at 82.2 in March. The forward-looking Expectations component of the survey is seen rising for the seventh straight month, hinting at sustainable improvement in firms’ 6-month economic outlook. Still, the reading is expected at 86.9, a print below the 100 “boom-bust” threshold, suggesting conditions are still deteriorating albeit at a gentler pace. Some recovery is to be expected as the government’s 82 billion euro fiscal boost filters into the broad economy, but the big question in Germany as well as most anywhere at this stage is whether growth is sustainable after stimulus cash dries up. On a comparative basis, the pace of GDP expansion in Germany is expected to underperform that of the US by 3.2% and 1.5% in 2009 and 2010, respectively. Looking at the Euro Zone as a whole, the currency bloc is set to trail the States by 1.5% over the next two years. This suggests the US will lead its European counterparts in unwinding fiscal and monetary stimulus measures and, most importantly, lead in reversing higher the trajectory of benchmark interest rates. Indeed, overnight index swaps reveal traders are pricing in the likelihood that the Fed will raise interest rates by 1.00 – 1.25% over the next 12 months as compared to 0.25 – 0.50% expected from the ECB, arguing for a yield shift in favor of the US Dollar that will put downward pressure on EURUSD.