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Economy in Brief
U.S. Energy Prices Rise Further
Retail gasoline prices increased to $4.59 per gallon in the week ended May 23...
S&P Flash PMIs Are Mixed in May As Manufacturing Erodes Slowly
Among the early reporting countries in Europe and Japan, the S&P PMI readings for May tilt toward weakness...
NABE Lowers Growth Expectations for Next Year & 2022
The NABE expects the economic expansion to continue through its third year...
Chicago Fed National Activity Index Improves in April
The Chicago Fed National Activity Index (CFNAI) rose to 0.47 during April...
IFO Registers Small Rebound on the Month
Germany's IFO index has rebounded on the month...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Louise Curley October 16, 2012
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.
ZEW SURVEY | Oct'12 | Sep'12 | Aug'12 | Jul'12 | Jun'12 | May'12 | Apr'12 | Mar'12 |
Germany: Current Conditions | 10.0 | 12.6 | 18.2 | 21.1 | 33.2 | 44.1 | 40.7 | 37.6 |
Germany: Expectations 6 Months Ahead | -11.5 | -18.2 | -25.5 | -19.6 | -16.9 | 10.8 | 23.4 | 22.3 |
Euro Area: Current Conditions | -79.4 | -76.3 | -75.1 | -72.9 | -73.2 | -60.2 | -49.0 | -48.4 |
Euro Area: Expectations 6 Months Ahead | -1.4 | -3.8 | -21.2 | -22.3 | -20.1 | -2.4 | 13.1 | 11.0 |