Germany's investor sentiment continued to weaken in July as US-China trade disputes and Iran conflicts weighed on financial market experts' confidence, survey data from the ZEW-Leibniz Centre for European Economic Research showed on Tuesday.
The economic confidence index declined for the third straight month in July, to -24.5 from -21.1 in June. This was the lowest score since October 2018 and weaker than the expected -22.
The current conditions index fell to -1.1 in July from +7.8 in June. The score turned negative for the first time since mid-2010. The expected level for July was +5.
"In particular the continued negative trend in incoming orders in the German industry is likely to have reinforced the financial market experts' pessimistic sentiment," ZEW President Achim Wambach said.
"A lasting containment of the factors that are causing uncertainty in the export-oriented sectors of the German economy is currently not in sight."
The Iran conflict seems to be intensifying and the ongoing trade dispute between the USA and China is a burden not only to Chinese economic development, Wambach noted.
Furthermore, ZEW President observed that no discernible progress has been made in the negotiations as to what Brexit will look like.
The economy ministry on Monday said industrial activity is set to remain sluggish amid moderating foreign demand, and the service sector growth is likely to lose steam, suggesting that economic trends in the biggest euro area economy will be weak in the second quarter.
ZEW survey also showed that the financial market experts' sentiment concerning the economic development of the euro area weakened slightly. The corresponding index dropped 0.1 points to -20.3 in July.
At the same time, the current conditions index fell 6.9 points to -10.6.