The December ZEW survey contained few surprises with both the current conditions and expectations components essentially matching the market consensus.
Current conditions weighed in at 55.0, up just 0.6 points versus November but still a couple of ticks short of their October print and 7.2 points below the third quarter average. Expectations showed a rather larger bounce, gaining nearly 6 points to 16.1 to reach their highest reading since August. Even so, December's print was also comfortably below the level seen earlier in the year and fully 38.7 points shy of the March high.
ZEW described the German economy as robust enough to withstand the knock-on effects of slowing global demand but acknowledged that increasing weakness in the emerging markets had hit domestic exporters. However, the main issue was still seen to be the influx of migrants that needs to be accommodated in the local labour market.
Today's results tentatively point to little real change in the Ifo business climate indicator, due Thursday.
The monthly survey, conducted by the Mannheim-based Center for European Economic Research (ZEW), asks German financial experts for their opinions on current economic conditions and the economic outlook for Germany as well as other major industrial economies.
The ZEW Indicator of Economic Sentiment is calculated from the results of the ZEW Financial Market Survey. The ZEW is followed closely as a precursor and predictor of the Ifo Sentiment Survey and as such is followed closely by market participants. The data are available the second week of the month for the preceding month. The survey provides a measure of analysts' view of current economic conditions as well as a gauge of expectations about the coming six months. The latter measure tends to have the larger market impact and reflects the difference between the share of analysts that are optimistic and the share of analysts that are pessimistic. About 350 financial experts take part in the survey.
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