The headline ZEW expectations index surged to 28.2 in April, following a dismal reading of -49.5 in March and overshooting Bloomberg’s median forecast at -42.0. The assessment of the current situation printed -91.5, far below the forecasted -77.5 and the prior reading of 43.1.
The divergence between the current situation and the expectations has not been this large since the global financial crisis.
With lockdown measures in full effect through April and eurozone countries making plans to gradually reopen the economy in the coming months, there are reasons to hope things won’t get much worse for the region. The timing of the easing of containment measures will be key in determining the recovery path.
EURUSD saw a modest drop around the time of the release, but the many different factors in play at the moment make it nearly impossible to pinpoint the price action down to one event. Other factors, such as demand for the US dollar and crude oil volatility are also in play today.
EURUSD slightly drops around the time of the data release
ZEW Germany headline index, assessment of current situation vs 6-month expectations of economic growth
Author: Ima Sammani, Junior FX Market Analyst