ZEW economic sentiment index for Germany drops unexpectedly in April

Analysts' confidence in the German economy fell back unexpectedly in April, the results of a closely followed survey revealed.

The ZEW institute's economic sentiment index fell from 13.0 points for March to 4.1 in April (consensus: 13.5).

According to the institute, that meant that no significant improvement in the economy was likely over the next two quarters.

Furthermore, while the assessment of the current situation in Germany jumped by 14.0 points to -32.5 "the economic situation is still considered relatively negative".

According to Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, the latest ZEW numbers stood in stark contrast with the results of the latest Sentix survey of investors and equity prices.

The latter two, he said, indicated that investors were "relatively unmoved" by the recent turmoil in the banking sector.

Respondents to the ZEW survey on the other hand "specifically [cited] fears of slowing loan growth, alongside still high inflation and rising interest rates, as downside risks.

" [...] the gap between resilience in equities and falling investor expectations won’t persist for long. One of the two are wrong. We think that equities weaken in Q2, eventually."