German investor sentiment deteriorates less than expected in October

German investor sentiment deteriorated less than expected in October, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.

The headline ZEW economic expectations index fell to -22.8 from -22.5 in September, coming in ahead of consensus expectations for a reading of -26.4.

Meanwhile, the current situation index declined to -25.3 from -19.9 the month before, versus expectations of -26.0.

ZEW President Achim Wambach said: "The slight decrease in both the ZEW indicator of economic sentiment and the situation indicator shows that financial market experts continue to expect a further deterioration of the German economy.

"The recent settlement in the trade dispute between the USA and China does not seem to diminish economic scepticism at this stage."

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said the survey was "soft, but likely still boosted by trade and Brexit optimism".

He said the headline index is still much better than the depressed Sentix published earlier in the month.

"We reckon some of the respondents filed their responses factoring-in the surge in optimism late last week, on the back of news of deals in both Brexit and the US-China trade negotiations.

"The details show that inflation expectations slipped, but short-term interest rate expectations rose sending a conflicting signal. We think that inflation expectations will rebound into year-end in line with the rebound in the headline CPI and energy CPI rates."