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German ZEW improves in November but sentiment still depressed

By Michele Maatouk

Date: Tuesday 13 Nov 2018

German ZEW improves in November but sentiment still depressed

(Sharecast News) - German economic sentiment unexpectedly improved in November but remained depressed, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.
The economic sentiment indicator rose to -24.1 from -24.7 in October, beating consensus expectations for a drop to -26.0. Still, it remained firmly in negative territory and well below the long-term average of 22.7 points.

Meanwhile, the current situation index dropped to 58.2 this month from 70.1 in October, missing expectations for a smaller drop to 65.0.

The gauge measuring investor confidence in the eurozone fell by 2.6 points to -22, while the index for the current economic situation in the eurozone declined by 13.8 points to 18.2.

ZEW president Achim Wambach said: "The figures for industrial production, retail sales and foreign trade in Germany all point towards a weak development of the German economy in the third quarter. This is reflected by the fact that the assessment of the current situation has experienced a decline.

"The expectations of the survey participants for the coming six months do not show any improvement. This means that, at the moment, they do not expect to see a speedy recovery of the currently weak development of the economy."

Pantheon Macroeconomics said investment sentiment remains depressed, but it appears that October's stock market swoon hasn't made things materially worse.

"The fall in the current situation's gauge looks ugly, but we are inclined to ignore that as long as expectations are firming. The details show that expectations for inflation and short-term rates in the eurozone dipped, while the outlook for stock markets improved slightly, with the notable exception of the French CAC 40."

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