ZEW: German investor sentiment rose in May on progress in US-EU trade talks

Germany's ZEW business sentiment index surged to 25.2 in May, rebounding sharply from -14 in April. Analysts had expected an increase to 11.3. According to ZEW President Achim Wambach, this improvement reflects three key factors: the new government taking office, progress in US-EU trade negotiations, and stabilizing inflation in Germany.

Meanwhile, the EU continues negotiations with the Trump administration. European authorities aim to reach a mutually acceptable solution, according to Bloomberg.

Nevertheless, Trump also presented a list of US exports worth $106 billion that would face counter-tariffs if negotiations fail.

As anticipated by Bloomberg-surveyed experts, Germany's economy is projected to stagnate this year. However, the situation may subsequently improve due to increased spending by the new government. Chancellor Friedrich Merz plans to invest hundreds of billions of euros to modernize infrastructure and shore up the military.