German economic sentiment unexpectedly deteriorates in June - ZEW

German economic sentiment unexpectedly deteriorated in June, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.

The index of economic sentiment fell to 18.6 from 20.6 the month before, missing expectations for an increase to 21.5.

However, the current situation index rose to 88.0 from 83.9, beating expectations for a reading of 85.0.

ZEW President Professor Achim Wambach said: "The prospects for the German economy remain favourable. This is not least due to the positive GDP growth in the European Union in the first quarter of 2017. 70.8 % of the financial market experts expect the current situation to remain as favourable as it is at the moment, and 23.9% even expect it to improve in the coming six months."

Pantheon Macroeconomics said: "A disappointing headline - despite the rise in the current situation index - signalling that investors’ upbeat sentiment is fading, at the margin. But the details were more positive. The expectations index in the Eurozone as a whole rose slightly due to improving sentiment in France and Italy, and investors’ stock market sentiment also increased across the major EZ indices.

"By contrast, Investors’ interest rate expectations slipped, likely in response to last week’s dovish ECB meeting, while their inflation expectations were broadly unchanged."