German ZEW sends more signs of caution - ING

FXStreet (Łódź) - Carsten Brzeski from ING comments on the disappointing German ZEW numbers, which showed that the downward trend continued in August.

Key quotes

"The ZEW index, which measures investors’ confidence, continued its recent downward trend and decreased in August for the eights month in a row and now stands at 8.6, from 27.1 in July."

"It will still take until Thursday before the hard facts will be presented but based on all available data the German economy should have stagnated."

"Contrary to a common belief, any stagnation of the economy was not so much the result of crisis in the Ukraine and European sanctions on Russia."

"The reversal of the mild-weather-effect on the construction sector, an unusual amount of holidays in May combined with ongoing problems in France and Italy should have been the main drivers of the slowdown of the German economy."

"Looking ahead, today’s ZEW sends a worrying signal that the growth performance in the second quarter could suddenly morph from a one-off into an undesired trend."

"Up to now, the fallout of the Ukraine crisis has been limited to a general return of uncertainty and a sharp drop in German exports to Russia."

"Obviously, a further escalation of the crisis could start to really hurt the economy."