Investor confidence in Germany collapses sharply in July 2016 after the index of economic sentiment in the German Center for Economic Research (ZEW) fell by 26 points to -6.8 points. This is the lowest level since November 2012. The market expectations were for a decline to about 9 points. The Brexit surprised the majority of financial analysts and the uncertainty about the consequences of the referendum on the German economy is largely the reason for the significant deterioration of attitudes. Moreover, the concerns about exports and the stability of the European banking and financial system is likely to weigh on the economic prospects.
There are significant decreases in many of ZEW’s sub-indices, the index for current economy situation decreased by 4.7 points to 49.8 points. The experts in the financial markets are concerned about the economic development of the Eurozone, as this indicator decreased by 34.9 points to -14.7 points. Attitudes about the current economy situation in the Eurozone worsen and the index decreased by 2.4 points to -12.4 points.
In its study ZEW includes analysts and institutional investors to assess the economic situation in Germany, and to share their expectations for the coming months.
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