Brexit woes send German investor sentiment to lowest since November 2012
Concerns over Brexit sent German investor confidence to its lowest level since November 2012 in July, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.
The indicator of economic sentiment fell to -6.8 from 19.2 in June, missing expectations for a reading of 9.0.
Meanwhile, the current situation index fell to 49.8 from 54.5 in June, undershooting expectations of 51.8, while the index of eurozone economic sentiment fell 34.9 points to -14.7.
Professor Achim Wambach, President of ZEW, said: “The Brexit vote has surprised the majority of financial market experts. Uncertainty about the vote’s consequences for the German economy is largely responsible for the substantial decline in economic sentiment
“In particular, concerns about the export prospects and the stability of the European banking and financial system are likely to be a burden on the economic outlook.”
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said the figures were “horrific”.
“This is much worse than we expected, and points to downside risks to EZ economic survey data this week. The month-to-month fall in the expectations index is close to a record, only eclipsed by the collapse during the dark days in 2012, when investors were seriously contemplating that the Eurozone would break up.
“The modest silver lining, though, is that such large falls usually mean-revert quickly. Brexit was a shock to investors, but the aftermath has sent a clear signal that the process of the UK leaving the EU will be a slow burner, at least in the short run.”