ZEW reports improvement in German investor sentiment in July above forecasts

According to the ZEW economic research institute, German investor sentiment rose to 52.7 points in July from 47.5 points in June. This exceeded the forecast of analysts polled by Reuters, who had expected a rise to 50.3.

As noted by ZEW head Achim Wambach, after significant improvements over the past two months, positive sentiment among respondents is becoming more and more sustainable. However, the organization's economists warned of a possible deterioration of optimism if there is no progress in trade negotiations between the US and Europe.

The survey's assessment of the current economic situation also rose significantly, with the index climbing to -59.5 points from -72 points.

Thomas Gitzel, chief economist at VP Bank, sees the recently announced reforms in Germany, including tax breaks and spending programs, as the main factor behind the growth in economic confidence. Interest rate cuts by the European Central Bank have also supported sentiment.

At the same time, Wambach noted that despite the recent turmoil in global trade policy, nearly two-thirds of the experts surveyed expect the German economy to show improvement.