German ZEW Survey (SEP)
Actual: -18.1 74.4
Expected: -17.0 75.0
Previous: -6.9 80.2
Euro Zone ZEW Survey (Economic Sentiment) (SEP)
German investor confidence fell to its lowest levels of the year according to the ZEW’s survey on the group’s sentiment. The expectations indicator for September fell to a weaker than expected -18.1 read, coming in only modestly below the market’s forecast, yet also the worst reading in nine months. At the same time, the current assessment figure put up its own six-month low. The German data was wholy overshadowed by the Euro-Zone economic forecast survey which hit its lowest level on records going back to 1999 when it printed at -20.3. Investor sentiment in all of the largest EZ member economies has plunged recently as financial markets struggle with a credit market that seen spreads balloon and costs soar. This only adds to existing problems like the effects of a record high euro on exports, rising commodity prices and waning US growth. With the ECB recently put on hold by the credit tumult, investors at the front lines are no longer confident that the halt on rates will be good for firms’ bottom lines; rather they are concerned over the high costs of credit and its end impact on capital investment and profit margins.
In the minutes after the euro barely dropped five points against the US dollar as traders kept the pair near 1.3860 for the looming US event risk.