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ZEW: Germany's Economic Outlook Brightens in June as US-Iran Deal to End War Sparks Optimism

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ZEW: Germany's Economic Outlook Brightens in June as US-Iran Deal to End War Sparks Optimism

Investor sentiment on Germany's economic outlook unexpectedly turned positive in June amid hopes that the war in the Middle East would finally reach an end after the US and Iran agreed on a preliminary deal.

The ZEW economic sentiment indicator for Germany improved to 10.5 points in June from -10.2 points in May, according to data published Tuesday by the research institute, which surveyed 190 analysts and institutional investors between June 8 and 15. The latest reading came in higher than the Investing.com consensus estimate of -5.8 points.

"The ZEW Indicator returns to positive territory as financial market experts expect the Iran conflict to be nearing an end. This is likely to ease the massive pressure on energy prices and inflation, which would benefit energy -intensive industries and private households and would strengthen domestic demand," ZEW President Achim Wambach said.

On the other hand, the current economic situation indicator for the country worsened, falling to -81 points from the previous -77.8 points. Analysts expected the reading to come in at -77.5 points.

Across various sectors, the expectations index for the automotive industry increased by 21.9 points to -35.3 points. The chemical and pharmaceutical industries, as well as the mechanical engineering, banks and insurance sectors were also among those that saw improved expectations. Meanwhile, the outlook for the construction industry deteriorated, dropping by 15.2 points to -12 points.

In the wider euro area, the economic sentiment indicator climbed to 9.5 points in June from -9.1 points in May, better than market forecasts of -7.2 points. In contrast, the current economic situation indicator decreased by 2 points to -43.4 points.

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