Euro Unmoved by Mixed German ZEW Survey, Weak EZ GDP Data
THE TAKEAWAY: German ZEW survey mixed -> Eurozone GDP weaker than expected -> Euro unmoved as market focus remains on political developments
The German-based ZEW center said its monthly index of investor and analyst expectations fell to 10.8 from 23.4 in April. The current situation index increased to 44.1 from the previous 39.0.
The ZEW index attempts to predict economic developments six months in advance. The center added that economic conditions have stabilized, and said it generally expects additional positive developments out of Germany over the next 6 months.
Meanwhile, Euro-area economic growth stagnated in 2012’s first quarter, the EU stats bureau said today. Growth was 0.0% when compared to Q4 2011. The report came after an earlier report which said German economic growth was more than expected in Q1. German economy has resisted recession as ultralow unemployment levels bolster consumer spending and offset a slump in international demand.
Even so, recent concerns over the uncertain Greek political situation have caused some doubts over the Euro’s future. The uncertain results of the recent Greek election and the inability of Greek leaders to form a stable government has thrown markets into limbo and cast doubts on Greece’s future with the single currency. A Greek exit would cause European governments to lose huge sums of money lent to Greece, and would likely throw the entire region into economic turmoil.
The most recent batch of data failed to significantly move markets. The Euro weakened slightly intraday after climbing earlier, on the back of the stronger than expected German data.