The German ZEW* survey showed a mixed picture in July as sentiment about the current situation improved, while expectations weakened further. The headline expectations index dropped from -9.0 to -15.1, while the consensus was looking for a more moderate decline (to -12.5). The current situation index on the contrary, jumped from 87.6 to 90.6, the second highest reading in survey history, while a worsening in sentiment was expected. The ZEW added that the economic situation remains robust in Germany, but public debt problems in some euro zone countries have dampened sentiment. The strong current situation index indicates that the German recovery remains surprisingly strong, which was also indicated by the latest IFO reading. Expectations weakened however further, probably due to the continued problems in the euro zone periphery.
ZEW ~ the Center for European Economic Research