FRANKFURT – A leading measure of investor confidence in Germany is expected to deteriorate further as Washington and Tehran both claim to have closed the Strait of Hormuz to some traffic.
An analysts’ poll predicted that the forward-looking economic sentiment reading from a survey conducted by Germany’s ZEW economic institute is expected to drop to -5.0 points from the -0.5 in March, its lowest mark in nearly a year and the largest fall since Russia attacked Ukraine in early 2022.
Another decline in the institute’s current conditions indicator is expected, which would keep it in negative territory – its home since December 2021. Analysts forecast a drop to -70.0 points from -62.9 in March.
The forward-looking reading for the Eurozone is set to improve to -3.6 points from -8.5, according to analysts.
“The US blockade of the Strait of Hormuz does not suggest that tankers from the Middle East will be supplying the world with oil and gas exports again in the near future,” Helaba noted. “Therefore, economic expectations are likely to remain pessimistic in the ZEW survey in April.”
Washington and Tehran claim to be blocking the waterway, a path for 20% of the world’s crude oil. Officials in both capitals confirmed that US forces seized an Iranian-flagged freighter headed for Tehran, with Iranian officials threatening retribution on US ships stationed in the region.
Reports suggested the two nations could meet for a second round of peace talks in Islamabad as early as Tuesday, but Al Jazeera reported that the Iranian Foreign Ministry said it has no plans to attend further discussions with US officials.
Looking for bottom
Along with seeking clarity amid the chaotic nature of the US-Iran ceasefire, which is set to expire Wednesday, investors are also trying to gauge how prices will climb due to the war and the corresponding surges in energy costs. For example, the preliminary reading for Eurozone inflation in March, covering only the first four weeks of the conflict, was revised up a tenth to 2.6% y/y, the highest in almost two years. Analysts say consumer price growth will likely accelerate again this month, and a number of economists have cut their growth estimates for Germany, Europe, and the global economy for the current year and 2027 due to the impact of the war.
Frankfurt-based pollster Sentix said last week that its headline investor confidence index for Germany fell to -27.2 points in April, its worst in a year. Additionally, the expectations component of the index this month hit its lowest mark since September 2024.
- Forward-looking measure forecast at -5.0 points (prev -0.5)
- Current conditions projected at -70.0 (prev -62.9)
- Date for next round of peace talks unclear
- Data due Tuesday at 09:00 GMT / 11:00 CET
By Eric Culp, European Editor
LiveSquawk News
@eculp.bsky.social
@EricCulpLS
20 April 2025 | 08:50 GMT
FRANKFURT – A leading measure of investor confidence in Germany is expected to deteriorate further as Washington and Tehran both claim to have closed the Strait of Hormuz to some traffic.
An analysts’ poll predicted that the forward-looking economic sentiment reading from a survey conducted by Germany’s ZEW economic institute is expected to drop to -5.0 points from the -0.5 in March, its lowest mark in nearly a year and the largest fall since Russia attacked Ukraine in early 2022.
Another decline in the institute’s current conditions indicator is expected, which would keep it in negative territory – its home since December 2021. Analysts forecast a drop to -70.0 points from -62.9 in March.
The forward-looking reading for the Eurozone is set to improve to -3.6 points from -8.5, according to analysts.
“The US blockade of the Strait of Hormuz does not suggest that tankers from the Middle East will be supplying the world with oil and gas exports again in the near future,” Helaba noted. “Therefore, economic expectations are likely to remain pessimistic in the ZEW survey in April.”
Washington and Tehran claim to be blocking the waterway, a path for 20% of the world’s crude oil. Officials in both capitals confirmed that US forces seized an Iranian-flagged freighter headed for Tehran, with Iranian officials threatening retribution on US ships stationed in the region.
Reports suggested the two nations could meet for a second round of peace talks in Islamabad as early as Tuesday, but Al Jazeera reported that the Iranian Foreign Ministry said it has no plans to attend further discussions with US officials.
Looking for bottom
Along with seeking clarity amid the chaotic nature of the US-Iran ceasefire, which is set to expire Wednesday, investors are also trying to gauge how prices will climb due to the war and the corresponding surges in energy costs. For example, the preliminary reading for Eurozone inflation in March, covering only the first four weeks of the conflict, was revised up a tenth to 2.6% y/y, the highest in almost two years. Analysts say consumer price growth will likely accelerate again this month, and a number of economists have cut their growth estimates for Germany, Europe, and the global economy for the current year and 2027 due to the impact of the war.
Frankfurt-based pollster Sentix said last week that its headline investor confidence index for Germany fell to -27.2 points in April, its worst in a year. Additionally, the expectations component of the index this month hit its lowest mark since September 2024.
And German business confidence released around this time last month slid to its lowest mark since February 2025.
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