German investor morale improves, rate cut hopes have 'doping effect', ZEW says
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German investor morale improved more than expected in February, with the economic sentiment index rising to 19.9 points from 15.2 points in January, beating expectations of 17.5. Over two-thirds of respondents expect the European Central Bank to make interest rate cuts in the coming six months, and nearly three-quarters are anticipating imminent rate cuts by the U.S. central bank. However, financial markets have been scaling back their bets on rate cuts as inflationary pressures linger and U.S. economic data remains mostly strong. The assessment of the economic situation in Germany fell more than expected to -81.7 points in February from -77.3 points the month before, indicating that the German economy is in a bad place. Economists disagree on what the reading foretells, with one suggesting a recession is on the way and another saying that while the assessment is low, it no longer signals a recession. The German economy contracted by 0.3% in 2023 due to persistent inflation, high energy prices, and weak foreign demand.

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https://www.investing.com/news/economy/german-investor-morale-improves-rate-cut-hopes-have-doping-effect-zew-says-3301903