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Germany's latest economic data paints a mixed picture: the Ifo Business Climate fell to 89.7, and ZEW current conditions dropped further to -77.4, signaling ongoing economic weakness. However, ZEW Economic Sentiment improved to 15.2, reflecting cautious optimism for recovery in 2025. Meanwhile, the DAX tests key support at 20,193 as technical indicators hint at short-term consolidation.
Last week, the European Central Bank (ECB) made a significant move to cut interest rates for the second time this year, after the first cut was initiated in the June meeting. So why is the ZEW Economic Sentiment and Current Conditions now so important?
EUR/USD is trading within a tight range ahead of today’s ZEW report, which suggests we could be facing a breakout of it (one way or another).
It is becoming difficult for investors to justify maintaining an optimistic view on the stock markets given a challenging macro outlook - and not just in the Eurozone
Whilst EUR/USD remains within a 150-pip range, momentum has turned higher form the midway point and hints at a run for 1.0600.
Data is finally picking up this week, with German trade and economic sentiment kicking off ahead of several central bank speakers including Powell and Bailey.
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