Trade Desk Thoughts - German ZEW Economic Sentiment , Euro-Area ZEW Economic Sentiment

German ZEW Economic Sentiment Actual -41.1, Expected -53.0, Previous -55.5
Euro-area ZEW Economic Sentiment Actual -40.9, Expected -55.0, Previous -55.7

Release Explanation: The Zentrum fur Europaissche Wirtschaftsforschung (Center for European Economic Research) report measures investor sentiment. The indicator reflects the difference between the share of Analysts that are optimistic and those that are pessimistic for the expected economic development in the region over the next six months. For example; 60% Optimistic and 40% Pessimistic will lead to a read of +20.

Trade Desk Thoughts: The ZEW Indicator for Germany improved much more than expected in September 2008, by 14.4 points. The indicator now stands at minus 41.1 points after minus 55.5 points the previous month. The released number is still well below its historical average of 28.0 points. The main motives cited were the decline in oil prices and the stronger dollar. At the same time, the economic expectations for the euro zone improved in September as well. The indicator rose by 14.8 points and now stands at minus 40.9 points.

Forex Technical Reaction: The euro made a 30 pip spike at the time of the release however, the move was quickly retraced. The pair continues to trade in a 50 pip range, established during the European session.

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