Tuesday, July 19, 2011

German ZEW Index - 19 July 2011

The German ZEW index dropped again in July; its fifth consecutive drop. The ZEW index, which measures investors' confidence now stands at -15.1, from -9.0 in June, its lowest level since January 2009. At the same time, the current assessment component surprised with a rebound to 90.6, from 87.6.

Dropping expectations and increasing current assessment shows that investors’ confidence seems to suffer from the sovereign debt crisis at both sides of the Pond, rather than from a soft patch. Financial market turmoil of the last week has clearly dented confidence. However, weaker confidence should not (yet) translate into weaker economic growth. With strong fundamentals, a high backlog of orders as a safety net for production and a pick-up in private consumption, the German economy looks set to cruise through the summer months.

Published: 19 July, 2011
written by: Bill Hubard , Chief Economist at Markets.com