The German ZEW Survey for November revealed that economic sentiment dropped to -15.7 points in October, from -11.5 points the month before, disappointing the consensus of analysts who were forecasting a slight improvement.

As such, the leading indicator turns around after two straight months of gains. The market was expecting a reading of -7.0.

The current situation index fell to 5.4 points in November from the previous 10.0. In this case, the market was expecting a reading of 5.8.

Economic expectations for the Eurozone fell to -2.6 points from -1.4 points in the prior month. The indicator for the current economic situation in the Eurozone hardly changed, falling just 0.9 points to -80.3.

"Since mid-2012 the economic expectations of the financial market experts move more or less sideways while remaining in the negative territory. Prevailing recessionary developments in the Eurozone impact the German economy via foreign trade and a lack of confidence. This is likely to be a burden for economic growth in Germany during the next six months," said ZEW President Wolfgang Franz.

Meanwhile, analysts at Digital Look said: "the German economy does not yet appear ready to turn around and head higher. In any case, we must be prudent with this data because it is biased towards the responses of financial market participants."

The Purchase Managers' Indices (PMIs) are more reliable in anticipating changes to the economic cycle, they explained.

FM

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