The German ZEW Economic Sentiment Index rose to 37.3 in September, up from 34.7 in August and well above the market forecast of 27.3, data released Tuesday showed.
However, the Current Situation Index deteriorated further, dropping to -76.4 from -68.6 in August, slightly weaker than expectations for -75.
For the broader Eurozone, the ZEW Economic Sentiment Index climbed to 26.1 in September, compared with 25.1 previously and ahead of the 20.3 consensus estimate.
Key takeaways
Financial market experts remain cautiously optimistic, with sentiment stabilizing despite a worsening assessment of current conditions. Risks persist, particularly around US tariff policy and the uncertainty surrounding Germany’s upcoming reform agenda.
Market reaction
EUR/USD is holding a modest bid near 1.1800, trading 0.33% higher on the day following the mixed ZEW survey results. The pair remains supported by broader US Dollar weakness, with sentiment favoring the upside as investors see limited room for further European Central Bank (ECB) rate cuts while expectations build for deeper policy easing by the US Federal Reserve (Fed).
Survey context
Ahead of the release, economists had expected sentiment to decline to 27.3 from 34.7, while projecting the Current Situation Index at -75. The stronger-than-expected headline reading may bolster optimism around Germany’s economic outlook and offer additional support to the euro. Any downside surprise was expected to have limited impact given the diverging policy outlooks between the ECB and the Fed.
