German ZEW Economic Sentiment Index drops unexpectedly to 79.8 in June

The German ZEW headline numbers for June showed that the Economic Sentiment Index worsened unexpectedly to 79.8 from 84.4 previous while beating estimates of 86.0.

Meanwhile, the Current Conditions sub-index recovered firmly to -9.1 in June as against -40.1 recorded in the previous month and -27.8 expectations.  

Separately, the Eurozone ZEW Economic Sentiment for June fell to 81.3 for the current month as compared to 84.0 previous and 77.0 consensus forecast. 

ZEW President Achim Wambach said, "The economic recovery is progressing. The decline in expectations is probably largely due to the considerably better assessment of the economic situation, which is now back at pre-crisis levels."

"The financial market experts therefore continue to expect a strong economic recovery for the next six months," Wambach added.

Also, on the docket was the bloc’s final Q1 GDP data, which arrived at -0.3% QoQ and -1.3% YoY, beating estimates across the time horizon.

Additionally, Eurozone’s inter-quarter Employment Change for Q1 came in at -0.3% vs. -0.3% expected.

FX market reaction

The euro showed little to no reaction to the mixed data dump, as EUR/USD kept its recovery attempt intact around 1.2175 amidst broad-based US dollar strength. The spot hit a daily low of 1.2164 at the European open.