Thread by @MacroTechnicals

monthly Germany ZEW Jul2019 Analysts' surveys vs Markets thread 1/n

• Sentiment drops -3.4 to -24.5 ( weaker than exp, 3rd mth down down, nearly matching Oct18)

• ECB to cut rates and return to QE

• charts vs DAX, Bunds, EUR, ECB coming up

zew.de/en/presse/pres…

2/n Germany ZEW vs DAX

• usually weaker business (ESI/PMI/IFO) and analysts' (ZEW) confidence means less growth rates / companies' profitability = DAX should be weaker YoY basis, but nowadays they all follow SPX which is driven by FED rate cut/China deal hope

3/n Germany ZEW vs Credit Risk

• usually weaker confidence would result or go in tandem with wider credit spreads (benchmark or default swaps) , but nowadays it's FED & ECB put already in place ... smh

4/n Germany ZEW vs BUNDs

• usually weaker survey would be in line with weaker business confidence = less growth = disinflatinary pressure = rates down

• BUNDs jumped slightly to 172.68
• BUXLs jumped to 201.86

5/n Germany ZEW vs ECB

• this overlay (I know the haters ;-) looks far stretched , but with MMT central banks have options of rate cuts (will come) and QE (will return too)

• ECB is dovish, was dovish, and will get a new very dovish new boss.

6/end Eurozone ZEW vs STOXX

• Germany heavyweight means Eurozone ZEW is dropping too

• -20.3

usually not bullish, but with MMT no severe stock market correction or higher volatility is accepted, central banks to be acting faster than ever before. ZIRP/NIRP infinity