Gavekal Capital: Beyond the Headline in Germany's ZEW Survey

Tuesday, November 18, 2014

Beyond the Headline in Germany's ZEW Survey

Today's release of the ZEW financial market survey for Germany revealed a surprising increase in economic expectations, compared to the consensus for a marginal improvement:

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chart note: 
dark blue = balance
red = improve
light blue = no change
black = worsen

Meanwhile, the question on current economic conditions revealed no change from low levels reached a month ago:

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Inflation expectations and the outlook for interest rates continue to fall, while hopes for an improvement in the DAX have risen, on balance:

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Profit expectations are looking brighter in a few industries, led by large increases in the Machinery and Electronics groups.

Chemicals
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Information Technology
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Consumer Goods & Retail
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Services
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Machine Construction
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Construction
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Electronics
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Telecommunications
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Conversely, the outlook for Financial, Utility, and Auto industries continues to be less promising, according to the 220 analysts queried in this month's survey:

Vehicle Construction
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Steel
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Utilities
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Banks
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Insurance Companies
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As the first in a long list of economic sentiment surveys, the question remains as to whether or not those in other countries will follow:

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