German business sentiment deteriorates more than expected

German business sentiment deteriorated more than expected in July, according to a survey released on Tuesday by the ZEW Center for European Economic Research in Mannheim.

The headline ZEW investor expectations index fell to -14.7 from -8.5 in June, coming in below consensus expectations for a reading of -10.5.

The current situation index edged down to -59.5 from -56.5, versus consensus expectations of -60.0.

ZEW President Achim Wambach said: "The ZEW indicator of economic sentiment is shifting even more noticeably into negative territory. Financial market experts predict a further deterioration in the economic situation by year-end.

"A key reason for this is the expectation of rising short-term interest rates in the eurozone and the USA. Additionally, important export markets like China are seen as relatively weak. The industrial sectors are likely to bear the brunt of the anticipated economic downturn, with profit expectations for these export-oriented industries experiencing a substantial decline once again."