The ZEW indicator for German investor confidence, is likely to move higher in coming months, though it is not expected to bring any positive surprises, Commerzbank analyst Simon Junker said in a note. The German investor sentiment dropped 1.7 points to 56 in October from 57.7 in the prior month, the latest survey from the Centre for European Economic Research or ZEW showed Tuesday. The expected reading was 58.8.
"The trend is still upwards, though, and the positive news to be expected on the economy is likely to push up the ZEW index in the coming months - although it is hardly likely to bring any positive surprises," the analyst said. Commerzbank expects Germany to record above-average growth in the third and fourth quarters. "The revival of industrial order intake supports this expectation: both domestic and foreign orders have risen noticeably, and capital goods are now benefiting in addition to intermediate goods," Junker said.
He expects the scepticism of many analysts about the sustainability of the economic recovery to fade on the back of good economic news anticipated soon.
"The ZEW index is then likely to climb close to its average highs."
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