Following last month's surprisingly upbeat results the March ZEW survey signalled a further increase in analysts' confidence in the German economy.
At 55.1 the current conditions index was up a surprisingly steep 9.6 points from its mid-quarter reading, its fifth consecutive increase and its highest mark since July 2014. Expectations rose only 1.8 points to 54.8, but this was also their fifth advance in as many months and their best outturn since February last year.
The ongoing improvement in sentiment reflects optimism about the potential combined effects of QE, low oil prices and the slide in the value of the euro. The results should bode well for stronger readings on the March PMIs and Ifo survey.
The monthly survey, conducted by the Mannheim-based Center for European Economic Research (ZEW), asks German financial experts for their opinions on current economic conditions and the economic outlook for Germany as well as other major industrial economies.
The ZEW Indicator of Economic Sentiment is calculated from the results of the ZEW Financial Market Survey. The ZEW is followed closely as a precursor and predictor of the Ifo Sentiment Survey and as such is followed closely by market participants. The data are available the second week of the month for the preceding month. The survey provides a measure of analysts' view of current economic conditions as well as a gauge of expectations about the coming six months. The latter measure tends to have the larger market impact and reflects the difference between the share of analysts that are optimistic and the share of analysts that are pessimistic. About 350 financial experts take part in the survey.
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