World Economy

German Investor Confidence Edges Up

Private sector output expanded at a slower pace than expected.Private sector output expanded at a slower pace than expected.

Confidence among investors in Germany inched up in a monthly survey Tuesday as the dashboard of Europe’s largest economy remained green, but fell short of forecasts for a big leap.

The ZEW institute’s headline barometer, which measures financial players’ expectations for the coming months, added 0.6 points to reach 17.6, AFP reported.

That was well short of the 20.0 reading predicted by analysts surveyed by FactSet, but continued the indicator’s recovery from an August slump.

October’s improvement was “decisively influenced by good growth figures in recent months,” ZEW president Achim Wambach said in a statement. Industrial production and new orders both beat expectations in August, he noted, while “similarly good growth figures for Europe improve conditions for German exports, which in any case are increasing strongly again.”

In a poll measuring investors’ mood about present economic conditions, the reading slipped slightly, suggesting the complex coalition talks forced on Chancellor Angela Merkel by September’s general election are weighing on the money men’s minds.

ZEW’s survey on the outlook for the eurozone in the coming months showed a big slide, losing 5.0 points to reach 26.7, while investors’ confidence about the present situation for the 19-nation single currency zone firmed slightly.

The Mannheim-based institute questioned 205 analysts and institutional investors to compile its survey.

Meanwhile, private sector output in Germany expanded at a slower pace than expected in October, dampening optimism over the health of the eurozone’s largest economy, preliminary data showed on Tuesday, reported.

Market research group Markit said that its Flash German Composite Output Index, which measures the combined output of both the manufacturing and service sectors fell from 57.7 in September to 56.9 in October, missing forecasts for 57.5.

The preliminary German manufacturing purchasing managers’ index dipped to 60.5 this month from a final reading of 60.6 in September. Analysts had expected the index to slip to 60.2 in October.

The flash services purchasing managers’ index declined to 55.2 this month from 55.6 in September, below expectations for a reading of 55.5. On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.

EUR/USD was at 1.174 from around 1.175 ahead of the release of the data, while EUR/GBP was at 0.8918 from 0.8910 earlier.

European stock markets were mildly higher after the open. Germany’s DAX rose 0.1%, the EURO STOXX 50 added 0.2%, France’s CAC 40 inched up 0.4%, while London’s FTSE 100 gained 0.1%.

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