FRANKFURT – A leading indicator of German investor confidence was expected to continue its slide after news of both Germany and the Eurozone entering technical recession in the first quarter.
An economists’ poll predicted that the forward-looking economic sentiment reading from this month’s survey conducted by Germany’s ZEW economic institute will drop to -14.0 points from the -10.7 reading reported in May. The institute’s current conditions indicator is forecast to slip to -37.5 from -32.5.
“Financial markets’ sentiment continues in a gradual slide since the Silver Valley Bank collapse, although the banking sector turmoil proves to be more of a slow burner rather than an outright crisis,” Oxford Economics said in a note. “The decline in sentiment is being driven by the expectations component [a measure for the next six months], although with growth in the Eurozone visibly losing momentum, the current situation assessment is likely to decline. Equity prices have stabilised and are up year-to-date, but we think there’s a lack of any clear driver of a sustained rally in equities, and instead expect a small decline in the rest of 2023.”
Casting a pall across markets was last week’s downward revision of the Eurozone first-quarter GPD growth rate to -0.1%. This matched the reading for the final three months of last year and put the economy in a technical recession. Germany also lowered its growth estimates for last quarter, which put it in recession.
“Weak data from the German industry is likely to have caused the mood of financial market participants to sour further in June,” HSBC noted.
Additionally, the Ifo business confidence index for Germany tumbled last month after six consecutive increases.
Sentix softens
The latest forecasts of further grumbling among financial market experts follow last week’s results of the June survey administered by German pollster Sentix. Headline investor confidence fell for the second straight month, dropping to its lowest level since November.
“The German economy is currently experiencing a downright crash,” Sentix said. “Instead of a spring revival, the recessionary forces are coming back with a vengeance. Above all, the situation indicators are plummeting, signalling that the downward forces are currently very present.”
Sentix analysts also had some brusque commentary for Berlin: “German economic policy is currently a shambles.”
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function check_channel_status_response(data) {
postMessage({ action: 'CheckChannelStatusReponse', stream_status: data.stream_status.status, onair: data.stream_status.onair, connected: data.stream_status.connected });
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session_info.application_name = data.application_name;
session_info.http_referrer = data.http_referrer;
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function start_log() {
var session_start_date = new Date();
session_start_time = session_start_date.getTime();
var months = ['Jan','Feb','Mar','Apr','May','Jun','Jul','Aug','Sep','Oct','Nov','Dec'];
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data_array.webrtc_protocol = '';
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session_info.packet_loss = data.packet_loss;
session_info.effective_latency = data.effective_latency;
session_info.mean_opinion_score = data.mean_opinion_score;
session_info.restarts = data.restarts;
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data_array.mean_opinion_score = session_info.mean_opinion_score;
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data_array.date = current_time;
data_array.webrtc_protocol = session_info.protocol;
data_array.ping_time = session_info.ping_time;
data_array.jitter = session_info.jitter;
data_array.packet_loss = session_info.packet_loss;
data_array.effective_latency = session_info.effective_latency;
data_array.mean_opinion_score = session_info.mean_opinion_score;
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- Outlook reading forecast at -14.0 (prev -10.7)
- Current conditions seen falling to -37.6 (prev -34.8)
- Declines expected after fall in Sentix results
- Weaker industrial, growth data loom
- Data due Tuesday 13 June at 09:00 GMT / 11:00 CEST
By Eric Culp, European Editor
LiveSquawk News
@EricCulpLS
12 June 2023 | 11:00 GMT
FRANKFURT – A leading indicator of German investor confidence was expected to continue its slide after news of both Germany and the Eurozone entering technical recession in the first quarter.
An economists’ poll predicted that the forward-looking economic sentiment reading from this month’s survey conducted by Germany’s ZEW economic institute will drop to -14.0 points from the -10.7 reading reported in May. The institute’s current conditions indicator is forecast to slip to -37.5 from -32.5.
“Financial markets’ sentiment continues in a gradual slide since the Silver Valley Bank collapse, although the banking sector turmoil proves to be more of a slow burner rather than an outright crisis,” Oxford Economics said in a note. “The decline in sentiment is being driven by the expectations component [a measure for the next six months], although with growth in the Eurozone visibly losing momentum, the current situation assessment is likely to decline. Equity prices have stabilised and are up year-to-date, but we think there’s a lack of any clear driver of a sustained rally in equities, and instead expect a small decline in the rest of 2023.”
Casting a pall across markets was last week’s downward revision of the Eurozone first-quarter GPD growth rate to -0.1%. This matched the reading for the final three months of last year and put the economy in a technical recession. Germany also lowered its growth estimates for last quarter, which put it in recession.
“Weak data from the German industry is likely to have caused the mood of financial market participants to sour further in June,” HSBC noted.
Additionally, the Ifo business confidence index for Germany tumbled last month after six consecutive increases.
Sentix softens
The latest forecasts of further grumbling among financial market experts follow last week’s results of the June survey administered by German pollster Sentix. Headline investor confidence fell for the second straight month, dropping to its lowest level since November.
“The German economy is currently experiencing a downright crash,” Sentix said. “Instead of a spring revival, the recessionary forces are coming back with a vengeance. Above all, the situation indicators are plummeting, signalling that the downward forces are currently very present.”
Sentix analysts also had some brusque commentary for Berlin: “German economic policy is currently a shambles.”