"Weak unemployment figures, damped leading indicators have caused concern in the U.S. that current economic upswing could lose momentum"
- The ZEW
German ZEW Economic Sentiment usually has a strong market impact, as it is a leading indicator of economic health. Investors and analysts usually are highly informed about the state of domestic economy, hence, a shift in their assessment reflects the real situation in the economy. This time, however, the Euro has lost only 0.06% against the U.S. Dollar and was still trading around 1.3730 even despite the fact, investors in Europe's largest economy are feeling dramatically less optimistic about economic prospects.
A monthly report indicated the ZEW index, which surveys around 300 German investors and economists, and provides the six-month economic outlook, eased back to 55.7 in February, following a 61.7 reading a month earlier and falling short of market's forecasts for a reading of 61.5. While this level still means more experts are positive about future prospects, it also marks the first decline in five months. The indicator of current situation posted a notable improvement, climbing back to 50.0, compared to market consensus of 44.0 and highly above January's 41.2.
Despite the deterioration, growth still remain on the upswing, as fourth quarter's GDP came above analysts' forecasts. With manufacturing activity at 32-month high, the economy is still projected to strengthen in the coming months.
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