German investor sentiment improves more than expected
By Michele Maatouk
Date: Tuesday 12 Nov 2019
(Sharecast News) - German investor sentiment improved more than expected in November amid growing optimism about Sino-US trade relations, according to the latest survey from the ZEW Center for European Economic Research in Manheim.
The headline ZEW economic expectations index improved to -2.1 from -22.8 in October, beating expectations for a reading of -13.0.
Meanwhile, the current situation index printed at -24.7 compared to -25.3 in October and versus expectations of -22.0.
ZEW President Achim Wambach said: "There is growing hope that the international economic policy environment will improve in the near future, which explains the sharp rise in the ZEW indicator of economic sentiment in November.
"In the meantime, the chances for an agreement between Great Britain and the EU and thus for a regulated withdrawal of Great Britain have noticeably increased. Punitive tariffs on car imports from the EU to the United States are also less likely than the projections a few weeks ago. An agreement in the trade conflict between the USA and China is appearing more likely too."
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said this was an "impressive" headline, flagged by the upbeat Sentix earlier in the month.
"A very solid equity market, and hopes of a deal between the US and China that would actually de-escalate the trade wars likely are the two main drivers of the jump. That said, we suspect that the tentative evidence of a bottom in German manufacturing activity, and the reduced prospect of a no-deal Brexit, also are contributing.
"Time will tell whether these turn into more sustainable tailwinds, but for now, we should be looking for evidence that optimism in the investment community spills over into the economic surveys. It often does, and if it did, it would make a big difference on this occasion given how depressed some of the sentiment surveys are."
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