Investing.com - The mood among German investors worsened in October due to concerns over the continuing trade dispute between the U.S. and China while concerns over the pending exit of the UK from the European Union also dampened sentiment, a survey showed on Tuesday.
The Mannheim-based ZEW research institute said its monthly survey showed its German economic sentiment fell to a negative 24.7 in October, matching the level seen in July which had been its lowest since 2012.
According to the Institute, the 14.1 point decline in the index was “remarkably strong”, surpassed only in the aftermath of the 2016 Brexit vote when the UK decided to leave the EU.
“Expectations for the German economy are dampening above all due to the intensifying trade dispute between the USA and China,” ZEW president Professor Achim Wambach explained, noting that negative expectations were beginning to impact German exports.
He added that additional negative influence on economic and export expectations could be seen from the “ever more likely” danger of a hard Brexit and a more unstable governing coalition in Germany.
According to the report, the deterioration in sentiment also spread to the wider euro zone which experienced a “very significant drop” to minus 19.4 points.