German investor morale in June plunges to lowest level since 2012

According to the closely watched survey released by the German ZEW think tank earlier Tuesday, German economic sentiment index plunged to -6.8, down from +19.2 in June, widely missing economists’ forecasts of a positive reading of 9. The June month reading was lowest since November 2012 and points to downside risks to EZ economic survey data this week.

“Uncertainty about the vote’s consequences for the German economy is largely responsible for the substantial decline in economic sentiment,” said ZEW President, Professor Achim Wambach.

The index tracking the current assessment of business conditions in Germany fell to 49.8, down from 54.5 in June, below forecasts of a reading of 51.8. The assessment of eurozone economic sentiment fell to -14.7, down from 20.2 in June.

Following the data, the euro traded mixed against major peers. While it was changed little against the pound, it dropped slightly against the greenback, franc and the yen.

“The survey suggests that investors are more worried about the effects of Brexit on the German economy than the financial market response implies,” said Jennifer McKeown at Capital Economics.