German analyst and investor sentiment about the outlook for Europe's largest economy improved this month, a survey showed today, but remained gloomy with the nation probably already in recession.
An indicator published by the ZEW research institute rose to -53.5 in November from -63.0 in October, buoyed by government stimulus and bank rescue plans.
A Reuters poll had pointed to a reading of -62.0 on the indicator, which was based on a survey of 287 analysts.
The euro briefly jumped against the dollar after the release of the indicator, which reflects the difference between the share of analysts and investors who are optimistic and the share of those who are pessimistic.
"Government measures to support the banking sector over the last weeks have left a positive impression," said Carsten Brzeski, an economist at ING Financial Markets, adding that an ECB interest rate cut had helped to put a floor under investor confidence.
"Nevertheless, today's ZEW indicator cannot mask the fact that Germany is very likely to have entered a recession in the third quarter," he added.
ZEW conducted the survey from October 27th to November 10th, giving most of the analysts and investors time to see details of the German government's economic stimulus package, which the cabinet approved on November 5th.
A separate gauge of analysts' assessment of current conditions fell to -50.4 in November from -35.9 the previous month, ZEW said. The consensus forecast in the Reuters poll was for -45.0.
The outlook for morale was uncertain despite the improvement in the headline sentiment measure, ZEW said.
"We are very uncertain about the future development of the indicator. I don't think this is a turning point," said Peter Westerheide, deputy head of ZEW's international finance department. "I would not expect a drastic improvement in expectations."
Reuters
