Latest market turbulences weigh on German investor sentiment

Data released earlier today Germany headline Economic Sentiment Indicator fell for the second month running, from +10.2 to +1.0, a slightly better than consensus for a +0.1 reading. Survey suggests that the recent turmoil in global financial markets and the soft tone of the domestic data continued to weigh on investor sentiment.

Tumbling stock markets, a stronger euro and more general concerns about the global growth outlook have clearly dented optimism about the German economy's growth prospects. Markets will now look even closer at possible next steps by the ECB at its March meeting. ECB is trying hard to temper and align market expectations to avoid another disappointment as after the December decision.

"We do not see German growth grinding to a halt, but we still envisage a slowdown from 1.4% in 2015 to 1.0% or so this year." said Capital Economics in a note to clients.