Sound bites: German ZEW economic sentiment continues along recovery track

Germany’s ZEW economic sentiment index continues to signal cautious progress in the recovery cycle. Let us just hope that economic spring is not going to turn into economic autumn. The German economy is still moving forward but it is still against significant headwinds. The weaker parts of the Eurozone economy are still casting a long shadow. German export recovery could drag under the effect of the slowdown in emerging markets. And there is still the threat of an early tapering in the US Fed’s monetary stimulus. Any one or all of the factors combined might pose a large headache for recovery confidence in German industry. For the time being the forward momentum in ZEW economic sentiment is looking reasonably self-assured, but it is not quite out of the woods yet. There is still a long way to go before Germany and the Eurozone are back on terra firma.