Current: German ZEW Index even weaker than feared

Current: German ZEW Index even weaker than feared

The mood among German investors has sunk to its lowest in almost six years, a survey showed, weighed down by a festering trade dispute with the United States and concerns about Italy's commitment to the euro zone.

The ZEW research institute indicator, which questioned 207 financial analysts on their expectations for the next six months, fell from -8.2 in May to 16.1 in June. Economists in a Bloomberg survey predicted a drop to minus 14. The negative reading means that more of those investors surveyed saw a worsening of the outlook than forecast an improvement.

Economy Minister Giovanni Tria looked to reassure nervous markets at the weekend, claiming the new government has no intention of leaving single currency and plans to focus on cutting debt levels.

A tit-for-tat trade battle is brewing across the Atlantic after Trump hit steel and aluminium imports with tariffs and justified them on "national security" grounds - to the outrage of historic allies like the European Union and Canada.

Closer to home, Wambach pointed to "fears of policies from the new Italian government that could destabilise the financial system".

"On top of this, German industry has been reporting worse than expected figures for exports, production and incoming orders for April".

Investor confidence has slumped in the country in recent months compared to the record high seen in January this year, as the momentum of eurozone economic growth has sputtered and geopolitical tensions have intensified. Still, the Bundesbank has expressed confidence that growth will recover in the second quarter as temporary effects wear off. Germany's DAX stock index has pared some of its losses in June after sliding more than 4 percent from a peak in May.

A separate gauge measuring investors' assessment of the German economy's current conditions edged down to 80.6 from 87.4 last month.

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