German economy unlikely to extend strong performance into Q2

Data released earlier today showed that German ZEW Indicator of Economic Sentiment dropped to 6.4 from 11.2 in April missing expectations for a rise to 12. The current situation index of the survey rose to 53.1 from 47.7 in the previous month. Economists had forecast a reading of 49.

The index defied expectations for improvement and weakened for the first time in three months. Weak data casts doubts on whether the the strong performance of the economy in the first quarter will continue into Q2.

"The strong growth of the German economy in the first quarter of 2016 appears to have surprised the financial market experts," ZEW President Achim Wambach said. "However, they seem not to expect the economic situation to improve at the same pace going forward."

The economic sentiment index for the euro area also declined in May. The sentiment indicator for Eurozone fell to 16.8 from 21.5 in April. The current situation index added 2.9 points to -9.2.