The ZEW economic expectations survey for August is due at 0900GMT

Preview via Morgan Stanley:

  • We expect the ZEW economic sentiment, which provides an early read on business sentiment amongst investors and analysts for the month of August, to fall by less than 0.1 standard deviations to 14.9, following a 17.5 print in July.
  • Sentiment among German financial analysts on the economic outlook for the next six months would thus have fallen a little further away from its long-term average of 24.1.
  • Current business conditions will likely fall only marginally. We pencil in a 1.2 point decrease to a reading of 85.2in August.
  • Together, these two ZEW series would result in a mild drop of the composite ZEW climate from 52.0 to 50.1. If confirmed, such a reading of the composite ZEW climate would be consistent with our initial estimate for the August Ifo business climate (published on August 25) of 115.6, a small downtick relative to the previous month.

Preview via Capital Economics, they say the "Euro's rise to weigh on investor sentiment"

  • The euro's appreciation, heightened geopolitical tensions and political developments in the US are all likely to weigh on investor sentiment in August.
  • Last month the ZEW Economic Sentiment Indicator (ESI) declined, perhaps because talks of ECB tapering and the associated rise in the euro and bond yields weighed on sentiment. In August, we think that the ESI will fall further.
  • After all, the euro has continued to rise, and the potential effects on growth were highlighted by data released earlier this month which showed a sharp fall in exports in June.
  • Meanwhile, heightened geopolitical tensions and concerns about US political developments might also have dampened investors' expectations.
  • Perhaps reflecting these factors, the timelier Sentix measure of investors' expectations slumped in August, boding ill for the ZEW ESI.
  • Accordingly, we have pencilled in a decline in the ZEW ESI this month from +17.5 to about +14.0. While that would leave it somewhat below its long- run average of +23.8, it would still mean that a majority of investors see economic conditions improving in the months ahead.