The eurozone will be thankful for small mercies at the moment, with a raft of data showing its economy is struggling at present. Yesterday, the German ZEW economic sentiment index unexpectedly rose by 2.5 points in January to hit -15.0 – much better than the -18.4 the markets had expected. However, it is possible that the reading has much to do with potentially negative factors, such as a no-deal Brexit and weak growth in China, already being anticipated. It would be remiss to ignore the fact that the reading is still firmly in negative territory and is well below the long-term average of 22.4 points.
The situation was worse in the eurozone as a whole, as although the ZEW figure nudged up to -20.9 this month from -21 the previous month, it was still below expectations of -20.1. 33.5% of the analysts surveyed expected the economic situation to get worse in the coming six months which is far from encouraging. Of course, this can quickly change, especially if the UK can agree the best route forward for Brexit and the US and China reach a deal to end the trade war.
Today is relatively quiet, although we will see the flash consumer confidence reading for January. The figure is expected to worsen to -6.5 from -6.2 the previous month. How different things are in the eurozone from this time last year. It does help show that nothing can be banked on and chickens should never be counted until they have hatched.