020 7898 0500Surprisingly disappointing German ZEW economic sentiment sparked a sell-off in the euro yesterday. The ZEW is a leading indicator of economic sentiment from the point of view of around 275 German institutional investors over the coming six months. The headline figure was expected to drop from last month but in this case it fell more than expected. This means that it has dropped for three consecutive months since the index touched a 21-month high.
This is largely because of weaker exports related to the continued strength of the euro, but is also linked to ongoing scandals in the car industry; German car manufacturers Volkswagen, BMW and Daimler continue to face allegations of more than a decade of collusion of cheating on diesel emission tests in the US.
Today is a busy day for eurozone economic data. First off, we have European Central Bank President Mario Draghi delivering the opening remarks at a conference in Germany. If he gives any clues on future policy then this could result in some movement in the single currency. This is followed by the Purchasing Managers’ Index for the service and manufacturing sectors for Germany, France and the eurozone.
