Analysts' expectations for the German economy unexpectedly stagnated in September, according to the ZEW research institute's closely watched monthly index, as disappointing recent data hurt sentiment.
The ZEW's economic expectations index clung to a reading of 0.5 point, compared with the 2.5 points expected, and well below the long-term average of 24.1 points. Survey participants' assessment of the current situation in Germany slipped by a greater-than-expected 2.5 points to 55.1 points. Their expectations for the eurozone economy rose by 0.8 point to 5.4 points, while their assessment of the current eurozone situation edged down 0.2 points to minus 10.5 points, ZEW said.
The marginally more positive direction of sentiment regarding the eurozone compared with Germany may reflect better news in recent weeks from the stuttering French economy and disappointment from Germany, with August industrial and manufacturing output both lagging expectations and trade data showing both imports and exports plunged in July from a year earlier.
"The current ambiguity of economic impulses from Germany and abroad means that forecasts for the next few months are difficult," said ZEW president Achim Wambach in the report. "German exports, particularly to non-EU countries, as well as industrial production figures have disappointed. By contrast, the economic environment in the European Union is improving. Overall, the ZEW Indicator of Economic Sentiment suggests that the economic situation in Germany will remain favorable in the coming six months."
German government bond yields were recently down 4 basis points at zero.
The euro was recently down 0.12% against the dollar at $1.1221, while the Dax index of top German stocks had gained 0.22% to 10,454.59.
The ZEW institute surveyed 205 analysts.