German investor sentiment unexpectedly improved February, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.
The headline ZEW investor expectations index rose to 71.2 from 61.8 in January, beating expectations for a decline to 59.5.
The current situation index printed at -67.2 in February from -66.4 the month before, versus expectations of -67.0.
ZEW President Professor Achim Wambach said: “The financial market experts are optimistic about the future. They are confident that the German economy will be back on the growth track within the next six months. Consumption and retail trade in particular are expected to recover significantly, accompanied by higher inflation expectations.”
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: “The leap in the ZEW investor expectations index is in contrast to the dip in the Sentix reported earlier in the month. More generally, the sustained trend in investors’ expectations, in contrast to a depressed current situation perception, matches the reality observed by investors and economists.
“Financial markets are in fine form, discounting a world in which the virus is history and where fiscal and monetary policy remain accommodative. By contrast, the economy is still under severe pressure. This gap will close eventually, and it will be tricky for investors when it does.”
