Expectations fall across the board
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05 May 2014
Posted in
sentix Economic News
Last month we pointed to the fact that the German economy had lost steam and had probably seen its best times in the current upswing already. Now, it looks as if the economy of the euro zone will suffer the same fate: While assessments of the current situation continue their way up, investors' 6-month expectations are down markedly in May. They fall for the third time in a row. This usually hints at a trend reversal. For Germany, the observations are quite similar: Here, too, the composite index retreats because expectations fall. At the same time the current situation is seen in a better shape than last month. The difference to the euro zone is that for Germany the composite index worsens since February already. For the other countries and regions, the composite indices are also weaker than in April. The developments are especially pronounced for Japan and Eastern Europe.
Headlines of the month
- In May, the composite index for the euro zone decreases from 14.1 to 12.8 points. This is its first setback since December. The development is driven by falling 6-month expectations which worsen for the third time in a row. This usually hints at a trend reversal.
- For Germany, the composite retreats, too. It now stands at 28.1 after 28.9 points in the previous month. Here, it is the expectations component as well which weighs on the index.
- Against this backdrop, the composite index for the global aggregate also decreases. This time, the composite indices for all regions and countries point downwards while they are worsening most for Japan and Eastern Europe.
