German ZEW Sentiment Jumps to 26.3 as Recovery Hopes Strengthen

Germany’s July ZEW survey showed a sharp improvement in investor sentiment, with the economic expectations index jumping to 26.3 from 10.5 and beating forecasts of 15.1. The current conditions gauge also improved slightly to -77.6, suggesting the economy is still weak but market participants are becoming more confident that recovery momentum is building. The stronger outlook was broad-based across exports, domestic demand, mechanical engineering, construction, pharmaceuticals and metals, though automotive sentiment worsened. Eurozone sentiment improved in tandem, signaling a wider regional lift in growth expectations. Markets may view the release as mildly supportive for European risk assets and the euro, but geopolitical risks and elevated oil prices remain key headwinds that could limit any sustained optimism.