German investor sentiment deteriorates amid Covid, Brexit woes
By Michele Maatouk
Date: Tuesday 13 Oct 2020
(Sharecast News) - German investor sentiment deteriorated more than expected in October amid concerns about the Covid-19 pandemic, Brexit and the US presidential election, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.
The headline ZEW investor expectations index fell to 56.1 from 77.4 in September, coming in below consensus expectations for a reading of 72.0.
The current situation gauge rose to -59.5 in October from -66.2 the month before, versus consensus expectations of -60.0.
ZEW President Professor Achim Wambach said: "The ZEW indicator of economic sentiment is still very clearly in positive territory. However, the great euphoria witnessed in August and September seems to have evaporated.
"The recent sharp rise in the number of Covid-19 cases has increased uncertainty about future economic development, as has the prospect of the UK leaving the EU without a trade deal. The current situation in the run-up to the presidential election in the United States further fuels uncertainty."
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics: "The inevitable correction in these data now seems to be underway. The expectations gauge crashed to near -50 during the initial collapse in markets in March, and has since rebounded sharply. This trend, however, is now reversing, consistent with a sustained return of the virus.
"If history is any guide, expectations will fall further, a shift usually associated with weakness in risk assets and the headline economic surveys. The details show that inflation expectations eased, though they remain significantly higher compared to the slump during lockdown."
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