Forex▲ Bullish
German ZEW Sentiment Jumps to 26.3, Highest Since February
Germany's ZEW sentiment index hit a seven-month high of 26.3 in July, far exceeding forecasts, as reforms and sectoral gains offset persistent automotive weakness and geopolitical risks.
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Investor confidence in Germany surged in July, with the ZEW Indicator of Economic Sentiment climbing to 26.3 from 10.5, well above the consensus estimate of 15.1 and the highest reading since February. The Current Situation Index also improved, rising to -77.6 from -81.0, a modest gain that still leaves assessments of the German economy deep in negative territory.
ZEW President Achim Wambach attributed the improving outlook to recent economic reforms, saying export-oriented industries and domestic demand both showed sustained growth. Sectoral data reinforced the pattern. Expectations improved sharply for mechanical engineering and domestic demand, while construction rebounded strongly after a weak June. The chemical and pharmaceutical industries also posted broad-based gains, though they remain in negative territory. The automotive sector was the exception, with sentiment deteriorating further to -46.6.