Investing.com - German economic sentiment for May deteriorated significantly more-than-expected, declining for the first time in six months, industry data showed on Tuesday.
In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment declined by 12.6 points to 10.8 in May from April’s reading of 23.4. Analysts had expected the index to decline by 4.4 points to 19.0 in May.
The Current Situation index rose to 44.1 in May, up from 40.7 in April and defying expectations for a decrease to 39.0.
On the index, a level above 0.0 indicates optimism, a level below 0.0 indicates pessimism.
Meanwhile, economic sentiment in the euro zone turned negative for the first time in three months in May, dropping by 15.5 points to minus 2.4 from a reading of 13.1 in April. Economists had expected euro zone economic sentiment to ease down 1.4 points to 11.7.
The indicator for the current economic situation in the Eurozone has decreased by 11.2 points and now stands at minus 60.2 points.
The report said that the outcome of the elections in Greece and France has made it more doubtful that European governments will resolutely fight the sovereign debt crisis, contributing to this month’s decline.
Commenting on the report, ZEW President Wolfgang Franz said, “Against the backdrop of the sovereign debt crisis in the euro zone, economic risks have risen during the previous weeks according to the financial market experts.”
“In view of the recession in some problem countries of the Eurozone it is important to pursue austerity measures with sound judgment," Mr. Franz added.
Following the release of that data, the euro remained higher against the U.S. dollar, with EUR/USD rising 0.21% to trade at 1.2849.
Meanwhile, European stock markets were off the highest levels of the session. The EURO STOXX 50 rose 0.55%, France’s CAC 40 added 0.8%, Germany's DAX eased up 0.3%, while London’s FTSE 100 gained 0.4%.
In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment declined by 12.6 points to 10.8 in May from April’s reading of 23.4. Analysts had expected the index to decline by 4.4 points to 19.0 in May.
The Current Situation index rose to 44.1 in May, up from 40.7 in April and defying expectations for a decrease to 39.0.
On the index, a level above 0.0 indicates optimism, a level below 0.0 indicates pessimism.
Meanwhile, economic sentiment in the euro zone turned negative for the first time in three months in May, dropping by 15.5 points to minus 2.4 from a reading of 13.1 in April. Economists had expected euro zone economic sentiment to ease down 1.4 points to 11.7.
The indicator for the current economic situation in the Eurozone has decreased by 11.2 points and now stands at minus 60.2 points.
The report said that the outcome of the elections in Greece and France has made it more doubtful that European governments will resolutely fight the sovereign debt crisis, contributing to this month’s decline.
Commenting on the report, ZEW President Wolfgang Franz said, “Against the backdrop of the sovereign debt crisis in the euro zone, economic risks have risen during the previous weeks according to the financial market experts.”
“In view of the recession in some problem countries of the Eurozone it is important to pursue austerity measures with sound judgment," Mr. Franz added.
Following the release of that data, the euro remained higher against the U.S. dollar, with EUR/USD rising 0.21% to trade at 1.2849.
Meanwhile, European stock markets were off the highest levels of the session. The EURO STOXX 50 rose 0.55%, France’s CAC 40 added 0.8%, Germany's DAX eased up 0.3%, while London’s FTSE 100 gained 0.4%.