The ZEW Center for European Economic Research in Mannheim said today that its index of investor and analyst expectations rose to -18.2 from -25.5 in August. Economists on average expected a gain to -20, according to a Bloomberg News survey, and to -17, according to Marketwatch.
The index aims to predict economic developments six months in advance. The negative reading indicates that financial market experts believe the German economy to lose momentum in that time frame.
Meanwhile, the current conditions index dropped to 12.6 from 18.2 in August.
Market sentiment was boosted by Germany’s constitutional court clearing the way for ratification of the permanent eurozone rescue fund, as well as by the U.S. Federal Reserve’s announcement of a third round of quantitative easing to stimulate growth and employment in the world’s largest economy.
Economic expectations for the eurozone improved significantly to -3.8 points in September. However, the indicator for the current economic situation in the eurozone dropped slightly to -76.3.