Macro September 09, 2019 / 02:46 pm UTC

Preview: Due September 17 - Eurozone/Germany ZEW Survey

By Giacomo Pallaro

We expect the ZEW survey to report an upward correction of the economic expectations index to -35.0 in September after the sharp fall of 19.6 points to -44.1 in August, the index's lowest level since December 2011. The ZEW economic expectations are also likely to correct higher in September after experiencing a fall in August.


The large fall in the economic expectations index in August was partly skewed by event risks that have dimmed since then. In particular, after U.S. President Donald Trump announced that a 10% tariff on an additional $300 billion of Chinese goods would be imposed from September 1, his administration has since decided to delay the tariffs until December 15. Additionally, recent developments in UK Parliament have reduced the probability of a no-deal Brexit, which rose immediately after the appointment of new Prime Minister Boris Johnson. The Italian political crisis has been resolved with a new pro-EU government coalition, with associated relief in the markets, as indicated by the compression of the Italian BTP yields. Finally, there are increasing talks about the possibility of the German government implementing some fiscal loosening in order to support investment in infrastructure and the green economy.

All in all, although some of these risks have been merely delayed, we expect this to have had a positive impact on sentiment.

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I, Giacomo Pallaro, the lead analyst certify that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further certify that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.