THE TAKEAWAY: ZEW Survey for German Economic Sentiment rises to 6.9 in December -> First positive indicator since May -> Euro rises slightly
German economic sentiment is positive for the first time in six months according to the ZEW survey. The sentiment survey in December rose to 6.9 from last month’s -15.7 indicator and beat expectations for -11.5 The ZEW survey for the current situation also rose from 5.4 to 5.7 in December, but came in slightly less than the expected 6.0. The economic sentiment survey for the entire Euro-zone was reported at 7.6 in December, beating last month’s -2.6 survey.
ZEW reported that the positive survey means that economic experts expect the German economy to stabilize by summer of 2013. The experts remain hopeful that the global economy will gain momentum and they said that positive US data contributed to this assessment. However, the stabilization may be no more than a bottoming out of the German economy.
ZEW’s optimism could be contrasted with last week’s comments by the Bundesbank, saying that they are cutting the German economic forecasts for 2012 and 2013 to 0.7% and 0.4% respectively. ZEW President Dr. Wolfgang Franz said, “Although the cooling down of the economic activity will last until the beginning of 2013, Germany will not have to face a recession. However, this only applies if the crises in the Euro-zone do not deepen once again.”
The Euro reacted slightly in forex markets to the better than expected sentiment survey. EURUSD climbed about ten points to 1.2975, but is already trading back below 1.2970. Resistance could come in by the key 1.3000 figure, and support could be provided at 1.2956, by the 61.8% retracement of the fall from October’s high to November’s low.
EURUSD Daily: December 11, 2012