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Economy in Brief
Philadelphia Fed Manufacturing Index Jumps in January
The Federal Reserve Bank of Philadelphia Factory Sector Business Conditions Index jumped to January to 26.5...
U.S. Initial Jobless Claims Ease, but Are Still High
Initial claims for unemployment insurance fell to 900,000 in the week ended January 16...
French Surveys Improve Despite Ongoing Virus Issues
The spread of the virus in Franc is still untamed...
U.S. Home Builder Sentiment Slips in January
The Composite Housing Market Index from the NAHB-Wells Fargo declined 3.5% m/m (+10.7% y/y) in January...
Decline in Refinancing Drags Down U.S. Mortgage Applications
The MBA Mortgage Loan Applications Index fell 1.9% w/w (+56.2% y/y) in the weekend January 15...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Louise Curley May 19, 2009
While
continuing to be pessimistic about current conditions, German investors
and financial analysts have become surprisingly more optimistic about
the economic outlook over the next six months. The
ZEW indicator of current economic conditions in May declined a further
1.2% and is now at a balance between pessimists and optimists of
-92.8%, close to the lowest on record, -96.1% in March 2003. The
indicator of sentiment for the economic outlook for the next six
months, however, rose sharply in May to 31.1% from 13.6% in April and
is now at a three year high and is above the long term average of
26.2%.
Among the factors that may have accounted for some of the improvement in the outlook of the participants in the survey, which was conducted between May 4th and May 18 was the ongoing rise in stock prices that had begun in early March. By May 18, the Frankfurt Extra Dax stock price index was up over 30% from the low on March 6. In addition, there were the releases of March exports and new orders showing the first month to month increases since early 2008, as shown in the second chart. The year to year declines in these series of 21.7% and 33.1%, respectively, probably were important factors in the appraisal of current conditions.
While the participants in the survey, still
expect profits in most industries to decline, they have moderated their
views on the declines and they expect profits in Banking and Insurance
to increase. The third chart shows the profit expectations
for the Banking, Automotive and Information Technology
industries.
ZEW Indicators % Bal | May 09 | Apr 09 | Mar 09 | Feb09 | Jan 09 |
---|---|---|---|---|---|
Current Macroeconomic Conditions | -92.8 | -91.6 | -89.1 | -86.2 | -77.1 |
Macroeconomic Expectations 6 M0 ahead | 31.1 | 13.0 | -3.5 | -5.8 | -31.0 |
Mar 09 | Feb 09 | Jan 09 | M/M% | Y/Y% | |
Exports (Bil Euros) | 66.42 | 65.97 | 84.15 | 0.68 | -21.70 |
New Orders (2005=100) | 80.5 | 72.9 | 120.3 | 3.34 | -33.08 |