German ZEW investor economic sentiment indicator likely improved further in April

Germany’s ZEW investor economic sentiment indicator is likely to have continued with its improvement in April, according to Societe Generale. After dropping sharply in January and February, the ZEW indicator is expected to have improved to 6.7 in April from March’s 4.3. In March, the improvement in the indicator was below expected. Other surveys imply a slow improvement. Furthermore, additional broad-business surveys rebounded nicely last month, implying the gloom witnessed in the beginning of 2016 might have been overdone, noted Societe Generale.

Strong industrial print has verified the continued solid activity in the beginning of 2016, whereas order point towards a slightly weaker second quarter, added Societe Generale. The German economy is seen as a relatively strong economy amidst global headwinds, where the wage growth, labor market and inflation are expected to be more vital for the growth prospect that China’s data.

“We are tracking well above our Q1 GDP forecast of 0.2% qoq, while Q2 looks more in line with our 0.3% qoq forecast”, said Societe Generale.