German investor confidence has risen in October to a three and a half-year high as investors grow increasingly confident the eurozone is recovering from economic turmoil and US politicians will resolve their fiscal disputes without a US default.
The ZEW indicator for economic sentiment in Germany has risen 3.2 points in October to 52.8 points, the ZEW Centre for European Economic Research says in a press release. That’s the third straight monthly gain, bringing the indicator to its highest level since April 2010 and more than double its historic average of 23.9 points.
‘The financial market experts remain optimistic,’ says Dr Clemens Fuest, president of ZEW, in the release, which measures six-month forecasts of analysts and economists. ‘At present a greater impact of the debate on the debt ceiling in the US is not visible.’
A standoff between Congress and the White House in the US over the country’s debt ceiling has caused some concern in world markets this month.
The government has been partly shut down since the beginning of October and the country could default on some of its debt if the ceiling isn’t raised by October 17. The US strife, however, has been offset by a growing perception that Europe is on the road to recovery and faces better economic times.
The six-month outlook for the eurozone as a whole has increased by 0.5 points to 59.1. Germany is entirely responsible for the improved outlook, as the forecast for France and Italy has fallen. Expectations for the UK have dropped 5.6 points to 36 while the outlook for the US has plunged 9.8 points to 46.5.
German investors feel more uncertain about the present in their country than the future, with the ZEW index measuring perception of the current economic situation falling 0.9 points to 29.7.
The perception of all other economies has also dropped, bar the UK, where the assessment has risen 1.5 points to negative 26.4. The perception of the current state of the US economy has dropped the most, by 14.4 points to negative 1.2.
The main ZEW indicator is based on a survey of 237 analysts taken between September 29 and October 14. The numbers represent the difference between the percentage of analysts with positive outlooks and those with negative outlooks.
