German ZEW Economic Sentiment index took a significant hit in November, plunging from 13.1 to a mere 7.4, sharply missing expectations of 13.2. Current Situation Index also declined, falling from -86.9 to -91.4, below the anticipated -86.0.
The broader Eurozone felt the impact as well, with its ZEW Economic Sentiment index dropping from 20.1 to 12.5, and the Current Situation Index slipping by 3.0 points to 43.8.
ZEW President Achim Wambach highlighted that the drop in German economic expectations was heavily influenced by two recent developments: Donald Trump’s election victory and the collapse of Germany’s government coalition.
According to Wambach, “Economic sentiment has declined – and the outcome of the US presidential election is likely to be the main reason for this.” The survey data reflect rising optimism toward the US, while sentiment for China and Eurozone continues to deteriorate, reinforcing concerns of broader instability.
