The German ZEW economic sentiment indicator dropped for the second consecutive month in April and even more than expected. The headline index fell from 14.1 to 7.6, while the consensus was looking for a more moderate decline (to 11.3). The current situation index, on the contrary, improved further, rising from 85.4 to 87.1, while a slight worsening was expected. Several reasons might explain the worsening in sentiment including the earthquake in Japan, the tensions in the Middle East and bailout for Portugal, but most of the decline was probably due to the ECB’s tightening of policy and speculation of higher interest rates in the coming months.