FRANKFURT – The forecast of financial market experts for Europe’s largest economy failed to match market predictions this month, but optimism for the coming half year was still at its best level since February 2022, according to German pollster ZEW.
The economic thinktank said Tuesday that its June expectations indicator for the next six months rose to 47.5 points versus 47.1 in May and the market prediction of 50.0.
The current conditions reading backslid to -73.8 points, which was short of the market expectation of -65.0 and the May result of –72.3.
The expectations measure for the Eurozone climbed to 51.3 points, the highest point since July 2021 and well ahead of market expectations of 47.8 and May’s 47.0.
Germany’s Dax 40 index of blue chips was slightly higher in Tuesday morning trading. It was off nearly 3.5% on the month but up almost 9% since mid-January.
Dour power
The ZEW noted that this month’s German results had stagnated. “These developments must be interpreted in the context of a constant situation indicator for the Eurozone as a whole. In contrast, the inflation expectations of the respondents increased, which is likely related to the inflation rate in May, which turned out higher than expected.”
German EU-harmonised inflation jumped to 2.8% last month from 2.4% in April, and Eurozone consumer price growth rose to 2.6% from 2.4%.
Upon releasing its latest polling results last week, German pollster Sentix said: “The stabilisation of the German economy is only making moderate progress.”
Sentix noted that the current situation component from its survey hit the highest level in a year as the outlook measure exited negative territory for the first time in months. The group explained that the uptick in expectations “shows that the German economy's dire state is only gradually easing and that the topic of stagflation is likely to remain on the agenda in the coming months.”
Some see silver lining
Taking another view, Thomas Gitzel, chief economist at VP Bank, put a positive spin on this month’s ZEW polling results. “Although economic expectations only improved slightly in June, what counts is the significant recovery in the economic barometer in recent months. The message is: an upswing is on the horizon.”
- View of present environment worsens
- EU reading for coming six months records gains
- Meh results for Germany come despite ECB rate cut
By Eric Culp, European Editor
LiveSquawk News
@EricCulpLS
18 June 2024 | 09:50 GMT
FRANKFURT – The forecast of financial market experts for Europe’s largest economy failed to match market predictions this month, but optimism for the coming half year was still at its best level since February 2022, according to German pollster ZEW.
The economic thinktank said Tuesday that its June expectations indicator for the next six months rose to 47.5 points versus 47.1 in May and the market prediction of 50.0.
The current conditions reading backslid to -73.8 points, which was short of the market expectation of -65.0 and the May result of –72.3.
The expectations measure for the Eurozone climbed to 51.3 points, the highest point since July 2021 and well ahead of market expectations of 47.8 and May’s 47.0.
Germany’s Dax 40 index of blue chips was slightly higher in Tuesday morning trading. It was off nearly 3.5% on the month but up almost 9% since mid-January.
Dour power
The ZEW noted that this month’s German results had stagnated. “These developments must be interpreted in the context of a constant situation indicator for the Eurozone as a whole. In contrast, the inflation expectations of the respondents increased, which is likely related to the inflation rate in May, which turned out higher than expected.”
German EU-harmonised inflation jumped to 2.8% last month from 2.4% in April, and Eurozone consumer price growth rose to 2.6% from 2.4%.
Upon releasing its latest polling results last week, German pollster Sentix said: “The stabilisation of the German economy is only making moderate progress.”
Sentix noted that the current situation component from its survey hit the highest level in a year as the outlook measure exited negative territory for the first time in months. The group explained that the uptick in expectations “shows that the German economy's dire state is only gradually easing and that the topic of stagflation is likely to remain on the agenda in the coming months.”
Some see silver lining
Taking another view, Thomas Gitzel, chief economist at VP Bank, put a positive spin on this month’s ZEW polling results. “Although economic expectations only improved slightly in June, what counts is the significant recovery in the economic barometer in recent months. The message is: an upswing is on the horizon.”
Business leaders seemed to agree with this sentiment. The most recent survey from German thinktank Ifo showed an improved outlook among corporate officials.
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