The ZEW Financial Market Survey measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic.
Participants are asked about their six-months expectations concerning the economy, inflation rates, interest rates, stock markets, and exchange rates in the Eurozone, Germany, Japan, United States, United Kingdom, France, and Italy as well as their expectations concerning the oil price.
Generally speaking, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).
ZEW stands for Zentrum für Europäische Wirtschaftsforschung, which translates to the Center for European Economic Research.
The ZEW Indicator of Economic Sentiment is a simple sentiment indicator created out of the monthly ZEW Financial Market Survey.
The ZEW Financial Market Survey is an aggregation of the sentiments of approximately 350 economists and analysts on the economic future of Germany in the medium-term.
The ZEW Financial Market Survey covers a number of areas, sectors, and regions, but only the questions related specifically to the German economy are used to create the ZEW Indicator of Economic Sentiment.
From this data, a simple indicator reading is given showing the difference between the number of analysts that are bullish on the German economy versus those who are bearish.
If the reading is a negative percentage, it means the majority of analysts are bearish. If the reading is positive, it means the majority is bullish.