Fundamental Updates \Nick Nasad \ 11:00 AM EDT \ March 16th, 2010
The ZEW confidence index fell for a sixth straight month for the March period as the troubles round Greece continued during the month and has shaken up financial markets to the point at which it affected the recovery of the Euro-zone. However, the index did not slide as much as forecast which could mean that the fallout has been factored in and that investors and analysts are again looking at the fundamentals which showed some improvement recently, as in the industrial production data released last week.
Here is a visual look of the ZEW indicator going back to early 2008. The index topped out in the 4th quarter just as the Greece debt situation began to unfold.
From the Release: “The ZEW Indicator of Economic Sentiment for Germany moved sidewards in March 2010. The indicator now stands at 44.5 points after 45.1 points in the previous month. This value is well above the indicator’s historical average of 27.2 points. The assessment of the current economic situation in Germany improves slightly compared to the previous month. The corresponding indicator rises by 2.9 points to minus 51.9 points.
Thus, the financial market experts expect the economy to recover slowly from the crisis within the next six months. Good news published in January with respect to industrial production and incoming orders in Germany seem to have reassured the financial market experts in this assessment. According to the financial market experts, the export-oriented industries, i.e. mechanical engineering, chemicals, and steel will drive economic growth. “German business activity has moved from the intensive care unit to the rehab. But it is still far from full recovery,” says ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.”
Also today, European finance ministers came together on a strategy for emergency loans to Greece in case its plan to cut its budget deficit fails. Those two pieces of news gave the Euro some support, helping it to pare its losses from yesterday’s session and push above the 1.37 level again against the Dollar.
The financial lifeline amounts to a bet by finance ministers that they can avert a euro crisis by sidestepping the no-bailout rules intended to sustain the 11-year-old currency. That has the feeling that they may be doing the bare minimum while hoping that Greece’s plan to cut €4.8 billion ($6.6 billion) through tax increases and spending cuts will avert any fiscal disaster in the nation. The plan did not specify the size of the loans, which countries would offer them, or how long they would last and cost.
Germany’s ZEW Sentiment Slightly Better Than Expected; EU Ministers Agree on Greece Deal
Fundamental Updates \ Nick Nasad \ 11:00 AM EDT \ March 16th, 2010The ZEW confidence index fell for a sixth straight month for the March period as the troubles round Greece continued during the month and has shaken up financial markets to the point at which it affected the recovery of the Euro-zone. However, the index did not slide as much as forecast which could mean that the fallout has been factored in and that investors and analysts are again looking at the fundamentals which showed some improvement recently, as in the industrial production data released last week.
Here is a visual look of the ZEW indicator going back to early 2008. The index topped out in the 4th quarter just as the Greece debt situation began to unfold.
Provided by: ZEW Indicator of Economic Sentiment
Official Release: Press Release
Also today, European finance ministers came together on a strategy for emergency loans to Greece in case its plan to cut its budget deficit fails. Those two pieces of news gave the Euro some support, helping it to pare its losses from yesterday’s session and push above the 1.37 level again against the Dollar.
The financial lifeline amounts to a bet by finance ministers that they can avert a euro crisis by sidestepping the no-bailout rules intended to sustain the 11-year-old currency. That has the feeling that they may be doing the bare minimum while hoping that Greece’s plan to cut €4.8 billion ($6.6 billion) through tax increases and spending cuts will avert any fiscal disaster in the nation. The plan did not specify the size of the loans, which countries would offer them, or how long they would last and cost.