German ZEW economic sentiment index rebounds less-than-expected in August

A report released by the ZEW Centre for Economic Research showed that index of German economic sentiment rose to 0.5 in August from a reading of minus 6.8 in July. The reading was way below markets’ expectations of a 2.0 reading.

German economic sentiment improved less than expected in August after having hit its lowest level since November 2012 in July. The Current Conditions Index rose to 57.6 in August from 49.8 in July, well above expectations for an increase to 50.0.

ZEW noted that political risks both in and outside of Europe were preventing a more optimistic outlook for Germany. Meanwhile, the index of euro zone economic sentiment increased to 4.6 in August from a negative 14.7 a month earlier. The consensus was looking for a reading of minus 6.3.

"Expectations were recovering somewhat after the surprise U.K. decision to leave the European Union (EU), though there was still uncertainty surrounding the resilience of the EU banking sector," said ZEW economists in a report.