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German Economy Shows Resilience, Economic Sentiment Surges

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Jun. 22 2016, Published 2:07 p.m. ET

German economic sentiment close to a one-year high

The ZEW (Centre for European Economic Research) published the German economic sentiment report for June on June 22, 2016. The sentiment level came out at 19.2, well above the forecast of 5.1. This was the highest level for the economic sentiment index in nearly a year, though it is slightly below the historical average of 24.4. The ZEW current conditions index was at 54.5, against the forecast of 52.8. The next major German data to look out for will be the Ifo Business Climate Index, which is scheduled to be released on Friday. For more details on the upcoming macro indicator release, please refer to Focus on Brexit, Volatility Expected to Rise in the Coming Week.

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Swiss trade surplus expands

The Swiss Federal Statistics Office reported a Swiss foreign trade balance of 3.8 billion Swiss francs against the forecast of 2.9 billion francs. Exports fell by 3.6%, while imports rose by 4.1%. The iShares MSCI Switzerland Capped ETF (EWL) was also positive as the trade surplus rose. The ETF rose by 0.96% on June 21.

Impact on the market

The iShares Currency Hedged MSCI Germany ETF (HEWG) rose by 1.3% after the release of the German economic sentiment data on June 21, 2016. The WisdomTree Germany Hedged Equity ETF (DXGE) followed a similar course, rising by 1.3%. The Deutsche X-trackers MSCI Germany Hedged Equity ETF (DBGR) rose 1.4%.

Deutsche Bank (DB) rose by a significant 3.1% as the banking ADRs (American depositary receipts) were trading on a positive bias. SAP (SAP) rose by 1.7%.

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