Germany's ZEW Economic Sentiment fell to 28.1 in October from 34.7, missing market expectations. The Current Situation index improved sharply, yet ZEW's president said the recovery is not self-sustaining.
German investor expectations weakened in October. The ZEW Economic Sentiment index declined from 34.7 to 28.1, missing market expectations of 31.6. The survey measures the sentiment of financial market experts and institutional investors on the economic outlook for Germany over the next six months.
Current conditions improve, expectations do not
The Current Situation index moved the other way. It rose from -47.1 to -35.9, beating expectations of -45.0. Even so, the reading remains deeply negative, which ActionForex says indicates a challenging economic environment.
ZEW President Achim Wambach cautioned that "the recovery is not self-sustaining," according to ActionForex. He cited elevated energy prices that squeeze household real incomes, raise production costs and keep inflation higher for longer.
Banks and insurers lose ground
Sector expectations were uneven. Banks and insurance fell 18.4 and 9.0 points, although their readings stayed positive at 34.5 and 37.4. Services and telecommunications also weakened, while steel, metal manufacturing and electronics showed more encouraging developments.
Eurozone sentiment slips too
Eurozone readings deteriorated as well. The Eurozone ZEW Economic Sentiment index fell from 25.8 to 18.5, below expectations of 24.2. However, the Eurozone Current Situation index only edged down from -13.9 to -14.8.
Sources: ActionForex, Investing.com
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