German investor confidence falls despite growth upgrade
Investor confidence for the German economic outlook unexpectedly declined, despite improved GDP growth forecasts, the monthly ZEW survey revealed.
While German GDP increased by 0.7% over the last quarter, investors have turned more pessimistic on the outlook for the Eurozone, which dropped by -4.7 bsp to 16.8 bsp and Germany in particular, with the German six month outlook declining by -6.8 to 6.4 bsp.
According to German Federal Statistical Office Destatis, improved growth figures coincided with a growing workforce, the number of people in employment increased by 1.3% while labour productivity grew by 1.1% compared to the previous year.
The growing caution among German investors is partly driven by international factors, according to Christian Libs, analyst at Nord LB: “Both the prospect of a Fed rate hike and the Brexit risk have clearly reduced expectations for an improved macroeconomic environment, however, this should not be overstated” he argues.