The October  ZEW survey of the German financial community showed that the 288 financial analysts and investors who participated in the survey have become less pessimistic.  The excess of pessimists regarding expectations for the economy six months ahead was 11.5% in October, compared with 18.2% in September and 25.5% in August.  The Euro crisis with its periods of hope and despair  has led to marked rises and falls in sentiment.  The recent  past has seen some hope. No doubt some of the improvement in sentiment can be attributed to the actions of the European Central Bank President, Mario Draghi, who announced that the Bank would do all it could to save the Euro and who later unveiled an unlimited bond purchase program.

The assessment of current conditions, however, weakened a bit.  The excess of optimists regarding current conditions that had been declining since June fell once more to 10.0% in October from 12.6% in September. The balances of opinion on German Current Conditions and Expectations are shown in the first chart.

The ZEW survey reveals that  Expectations six months ahead for the Euro Area are surprisingly less pessimistic than those for the Euro Area  The pessimists in the Euro Area outweigh the optimists by only 1.4%, compared with 11.5% in Germany.  Current conditions in the Euro area are a vastly different story.  With many Euro Area countries in recession, it is not surprising that the pessimists outweigh the optimists regarding current conditions by a large margin.  The balance of opinion on Euro Area current conditions was -79.4% in October, compared with -76.3% in September.  The balances of opinion on Euro Area Current Conditions and Expectations are shown in the second chart.