The economic situation in Europe has been deteriorating and it is going from bad to worse. The manufacturing sector is in contraction in Spain, Italy and France, while in Germany and the Eurozone it is in recession. The industrial production is at a similar place, while retail sales are pretty weak.

The economic sentiment is obviously pretty bad too. A while ago, the economic sentiment for Germany and the Eurozone were released and the sentiment deteriorated further. Here are the figures:

• German ZEW economic sentiment Current -13.5 against -6.3 expected
• Previous -1.1
• German ZEW economic sentiment Expectations -44.1 vs -28.0 expected
• Prior -24.5

• Eurozone ZEW economic sentiment Expectations -43.6
• Prior -20.3

The numbers were pretty bad last month, but they got much worse in August. The German economic sentiment has fallen to the lowest since 2010 while expectations have declined to the lowest level since 2011. The surveying firm ZEW released the note below with the report:

“Indicator of economic sentiment points to a significant deterioration in the outlook for the German economy. The most recent escalation in the US-China trade dispute, the risk of competitive devaluations, and increased likelihood of a no-deal Brexit places additional pressure on the already weak economic growth. This will most likely put further strain on the development of German exports and industrial production.”

Not much to add here, although the Euro is crawling higher right now.