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German investor confidence falls sharply

  • The German ZEW survey of investor confidence has dropped to 55.7 in February from 61.7 in January and missed consensus that was also 61.7.
  • However, the current situation print has surged to 50 from 41.2 and exceeded forecasts of 44.
  • Sentiment for the eurozone has declined to 68.5 from 73.3 and undershot expectations of 73.9.
  • The drop in the headline figure was probably caused by recent uncertainties, such as weak U.S. labor and other economic data, and the volatility in emerging markets, ZEW says, adding that the fall "must not be overstated."
  • The DAX is -0.25%, although the euro is +0.1% at $1.3714. (PR)
  • ETFs: EWG, BUND, EWGS, GERJ, DXGE, DBGR, BUNL, FGM, BUNT, GGOV, HEWG
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Comments (2)
  • CautiousInvestor
    , contributor
    Comments (3059) | Send Message
     
    While these sentiment surveys are always "noisy", there could be much larger forces at work behind falling German confidence

     

    In this vein, Cliff Watchtel offered some Great Lessons for the coming week and notes a growing divergence between EMU elites and popular support for the loss of sovereignty and integration needed for Europe to become the United States of Europe.

     

    He then notes "over the past week, however, that lack of popular support appeared on the official level in three different locales:

     

    - Switzerland's vote against free immigration into Switzerland

     

    - Scotland's edging closer to an independence vote, and the UK's warning to Scotland that it won't be allowed to keep the pound if it votes for independence

     

    - The German Constitutional Court's ruling on the legality of the OMT: As we discussed last week here, the Court didn't simply refer the decision to the EU's highest court. It also said that as far as Germany is concerned, the OMT program (that allows the ECB to become buyer of last resort for sovereign bonds) is illegal and therefore German participation (aka funding) is unlikely at this time.

     

    Going a bit further back to the end of 2013, we then have the failure of the single resolution mechanism to be the effective safety net for failed banks that it needed to be in order to restore confidence in EU banks, prevent another banking crisis, and allow the coming ECB bank stress tests to be rigorous enough to uncover all of the weak banks without risking a crisis from finding too many undercapitalized banks and no safety net for them."
    18 Feb 2014, 06:28 AM Reply Like
  • june1234
    , contributor
    Comments (3064) | Send Message
     
    the German court also ruled it recognized the fact that the German constitutional court does not have jurisdiction over the ECB and it referred the matter to the European Court of Justice for its consideration. Bond buying will continue
    18 Feb 2014, 09:19 AM Reply Like
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