German ZEW Economic Sentiment rose to -13.4 in February, up from -15 and beat expectation of -13.7. Despite the improvement, the data stayed negative and well below long-term average of 22.4. Current Situation index, however, dropped to 15, down from 27.6 and missed expectation of 21. Eurozone ZEW Economic Sentiment also rose to -16.6, up from -20.9 and beat expectation of -18.2. Eurozone Current Situation index dropped -8.3 to -3.
“At the moment, we do not expect a rapid recovery of the slowing German economy. The economic situation in Germany has been weak, especially in the manufacturing sector. The figures for industrial production have once again seen a decrease, incoming orders are stagnant and foreign trade currently provides no fresh impulses. All of this is reflected in the fact that the assessment of the current situation has experienced a considerable decline. For the next six months, the financial market experts in our survey do not expect any improvement,” comments ZEW President Professor Achim Wambach.
ECB de Guindos: Analyzing causes of European slowdown, but confident on inflation outlook
ECB Vice President Luis de Guindos said policy makers are “currently analyzing the causes of the economic slowdown in Europe, some of which are temporary”. But he emphasized that “we will not take a decision until we have conducted a thorough analysis.”
And, regarding inflation, he said “even if energy prices were to fall a little in the coming months, we are confident that inflation will, over the medium term, converge towards our aim of below, but close to, 2 percent.”
On no-deal Brexit, de Guindos said “a disorderly Brexit… would represent a significant macroeconomic shock at a time when the European economy is already weakened.”