The Eurozone ZEW Economic Sentiment Index Is on a Constant Rise

According to a report from the Center for European Economic Research, the Eurozone ZEW Economic Sentiment Index rose to 37.7 in June 2017, compared to 35.1 in May 2017. 

This performance has met the market’s expectation of 37.2, and it’s the index’s highest figure since August 2015.

This index measures the level of optimism economists have about the Eurozone’s current economic situation and the expected economic scenario in the region for the next six months. The index has been rising consistently since August 2016. It fell to 14.7 in July 2016 after the Brexit decision in June.

The major economic indicators of the Eurozone’s economy (VGK) (IEV) are showing a turning point. The region’s economic growth also improved 0.6% in 1Q17, compared to 0.5% in 4Q16. Its growth was also better than the initial estimate of 0.5% and was mainly driven by better improvements in household consumption and fixed investments.

Improvements in household consumption indicate that consumers are more optimistic about economic conditions. Because economists are also optimistic about the economic scenario, various businesses’ demand outlooks are also improving.

The Vanguard FTSE Europe ETF (VGK) and the iShares Europe ETF (IEV), which track the performance of the Eurozone (HEDJ), rose marginally in June 2017.

In the next part of this series, we’ll analyze the performance of the Germany ZEW Economic Sentiment Index in June 2017.