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12 Aug 2014
German ZEW index much softer than expected - TD Securities
FXStreet (Łódź) - The TD Securities team of analysts point out that the German ZEW index for August came in considerably lower than expected by the markets, with the economic sentiment dropping to 8.6 from 27.1 (vs 18.2 exp) and the Current Situation deteriorating from 61.8 to 44.3 (vs 55.5 exp).
Key quotes
"We had highlighted downside risks due to geopolitical uncertainty, and the ZEW spokesman confirmed that the weakness was based on concerns around what was playing out in Ukraine and Russia, and noted that IP and incoming orders suggested markedly reduced investment activities by German firms."
"The big question now will be how much of this weakness shows up in the PMI and IFO data on the 21st and 25th, respectively, since while the ZEW can be quite volatile, the PMI and IFO tend to better reflect actual underlying growth trends."
Key quotes
"We had highlighted downside risks due to geopolitical uncertainty, and the ZEW spokesman confirmed that the weakness was based on concerns around what was playing out in Ukraine and Russia, and noted that IP and incoming orders suggested markedly reduced investment activities by German firms."
"The big question now will be how much of this weakness shows up in the PMI and IFO data on the 21st and 25th, respectively, since while the ZEW can be quite volatile, the PMI and IFO tend to better reflect actual underlying growth trends."