A second consecutive decline in ZEW investor sentiment in May, which would add to fears that the German recovery is slowing. The ZEW headline Economic Sentiment Indicator, which measures financial market investors' expectations for the German economy in six months' time, fell for the first time since October 2014 in April.
Financial market indicators point to a further decline in sentiment in May, with equity prices softening. Admittedly, the euro's latest appreciation may point to relative optimism about the outlook, but it could damage the export-dependent German economy if it continues, says Capital Economics.
Indeed, the German Sentix Investor Sentiment Index, which has been pretty closely correlated with the ZEW in the past, registered a further decline in May. The ZEW equivalent falling from +53.3 to something like +45.0, but this would imply that the vast majority of respondents still expect conditions to improve.
