- ZEW
German investor confidence dropped to the lowest level in a year, as the diesel emissions scandal at Volkswagen and slowdown in emerging markets took their toll. The ZEW Center for European Economic Research said its index of investor expectations, which aims to foresee economic developments six months ahead, plummeted to 1.9 in October down from 12.1 in the previous month. That was the seventh straight decline and compared with economists median forecast for a drop to 6.5. A gauge tracking current conditions plunged to 55.2 points from 67.5 in September, coming in against expectations for a decline to 64.7. The recent deterioration of investor morale may be attributed to concerns that slowing growth in emerging markets would undermine the export sector of Euro zone's biggest economy, while the Volkswagen emissions scandal also weighed on sentiment.
Nevertheless, the German economy remains resilient, while solid growth in the US and other key export markets should balance the weakness in trade with China. Yet, the recent report on German inflation provided no relief for the ECB, who have been struggling to revive inflation in the Euro zone. German consumer prices declined 0.2% on month in September, while in annual terms, consumer inflation was flat in September.
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