German ZEW investor economic sentiment indicator likely rebounded strongly in January

The German ZEW investor economic sentiment indicator is expected to have rebounded significantly in January. According to a Societe Generale research report, the sentiment indicator is likely to have risen from 13.8 in December to 21 in January.

The stock market of Germany has rebounded considerably in the past month, riding on a wave of upbeat data for the German economy. Along with continuous robust domestic demand, exports have also recovered strongly at the end of 2016, owing to increasing employment and additional fiscal spending due to the migration influx.

The German economy therefore grew 1.9 percent in 2016, the strongest in five years. Financial markets expectations still have certain space to increase, although political risk from both sides of the Atlantic might result in periods of volatility, said Societe Generale.

“We expect only slightly weaker growth in 2017, although fewer working days this year may make the slowdown in annual growth (unadjusted figures) look optically bigger”, added Societe Generale.