logo
German economic sentiment rebounds in May as tariff fears ease

German economic sentiment rebounds in May as tariff fears ease

Euronews13-05-2025

Germany's economic sentiment staged a strong rebound in May, recovering from its lowest levels in over two years, as easing trade tensions and political stability lifted the business outlook.
According to the latest ZEW Economic Sentiment survey, the indicator rose to 25.2 points, up from minus 14 in April which was the weakest reading since July 2023.
The recovery far outpaced analysts' expectations of 11.9, reflecting renewed confidence across key sectors.
"Expectations are brightening," ZEW President, Professor Achim Wambach, PhD, said, noting that the formation of the new federal government, the progress in the tariff disputes, and a stabilising inflation rate are contributing to the increased optimism.
The eurozone saw a similarly strong recovery, with sentiment climbing to 11.6 points in May from minus 18.5 in April, well above expectations of minus 3.5. The current economic assessment for the monetary union also improved, rising 8.5 points to minus 42.4. Despite this upbeat forward-looking sentiment, Germany's current economic conditions remain grim, with the corresponding index dipping a further 0.8 points to minus 82.0 — among the lowest levels in recent years.
The ZEW survey highlighted growing optimism for the next six months, citing improvements in banking, automotive, chemical, metal, machinery and steel industries.
Stabilising inflation, a more predictable trade environment, and hopes for further interest rate cuts by the European Central Bank are fuelling expectations of a broader recovery.
A rebound in domestic demand and a revival in the construction sector are also anticipated, offering a more balanced growth outlook after months of stagnation.
German stocks showed only modest gains on Tuesday, as the DAX index rose 0.2% to 23,600. A day earlier, the leading German stock market index opened at over 23,900 points, setting new record highs, buoyed by optimism over a US-China trade truce.
Among top movers, Bayer rose 8.5% after beating earnings expectations for the first quarter. The German pharmaceutical giant posted a 7.4% decline in adjusted EBITDA to €4.09 billion, but the figure surpassed analyst forecasts thanks to strong demand for new prescription drugs, which helped offset weakness in its crop science division. The company confirmed its full-year outlook and continued with a cost-cutting programme that included 2,000 job reductions in the first three months of the year.
Shares of major German automakers also advanced. Volkswagen gained 1.8%, while BMW, Porsche and Mercedes-Benz were each up by about 1%, supported by improving export prospects.
Losses were led by Germany's two largest reinsurers. Munich Re fell% and Hannover Rueck dropped 2.8%, after reporting hits to their first-quarter profits due to claims linked to wildfires in Los Angeles.
Vonovia declined 3.5% after announcing the issuance of €1.3 billion in convertible bonds.
Fraport, the operator of Frankfurt Airport, saw its shares fall 1.8% after reporting a sharper-than-expected 16.5 percent drop in first-quarter EBITDA to €177.5 million. The company cited rising personnel and regulatory costs in Germany as key headwinds. While full-year guidance was maintained, the weak margin performance weighed on investor sentiment.
German pharmaceutical giant Bayer's shares jumped 10.5% on the London Stock Exchange on Tuesday morning following the company experiencing higher demand for its new cancer and kidney drugs in the first quarter of 2025.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) before special items was €4.1 billion for the first quarter of 2025. Although this was a 7.4% fall from the corresponding quarter a year ago, it was still above market expectations of €3.9bn, according to Bloomberg.
Group sales for the first quarter was €13.7bn, which was a fall of -0.1% compared to the same quarter in 2024. Core earnings per share plunged 11.7% to €2.5.
Bill Anderson, Bayer's chief executive officer (CEO) was optimistic that the earnings jump in the pharmaceuticals division was a sign that teams were learning to do more with less. He also reiterated his confidence in the fundamentals of the company and the momentum of its launches.
The company also revealed that it is closely monitoring ongoing economic and geopolitical changes, as well as their impact on the company.
Bayer confirmed its full-year 2025 outlook at constant currencies and expects that the pharmaceutical division will deliver at the higher end of the previously shared sales and profitability guidance range.
Bayer's pharmaceuticals division's sales grew 4.4% in the first quarter of 2025, mainly boosted by North American sales, although the Europe, Middle East and Africa (EMEA) region lagged.
The company's new hormone therapy drug for prostate cancer, Nubeqa, has seen considerable demand, along with Kerendia, used to treat chronic kidney disease.
Eylea, mainly used to treat various eye conditions, has also seen sales increase, while Bayer's radiology business has been strong too. Similarly, contraceptive drugs such as YAZ and Mirena have recorded robust growth as well. However, the anticoagulant Xarelto has seen a decline mainly because of patent expirations.
On the other hand, sales for Bayer's crop-science branch dropped 4.1% in the first quarter of the year, partly because of slowing pesticide demand. Ongoing low prices for glyphosate, which is the active ingredient in the Roundup weedkiller, has also contributed to lower crop-science performance.
The company has previously shared that it could potentially stop producing glyphosate in Louisiana as Chinese competition intensifies.
Bayer is also continuing to deal with significant litigation related to products that the company inherited in its Monsanto acquisition back in 2018.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Pork, EVs, and diplomatic reset: EU-China trade fight heats up
Pork, EVs, and diplomatic reset: EU-China trade fight heats up

Euronews

time9 hours ago

  • Euronews

Pork, EVs, and diplomatic reset: EU-China trade fight heats up

The road to a diplomatic reset in EU-China relations is paved with escalating tit-for-tat trade measures, casting a shadow over efforts to ease long-standing disputes. On Tuesday, Chinese authorities announced a six-month extension of their anti-dumping investigation into pork imports from the EU, citing the complexity of the case as justification for the delay. Initially launched in June 2024, the probe will now run until the end of the year, targeting more than €1.75 billion in pork exports, particularly from Spain, the Netherlands, and Denmark. The announcement came as Brussels and Beijing are seeking to stabilise relations despite years of friction, exacerbated by US president's trade war against China and a shifting global order. A crucial milestone in this process will be the EU-China summit, now confirmed for the second half of July 2025 in Beijing. But China's extension of the investigation into pork imports show that the trade relationship between the EU and China is still fraught, with each side using sensitive sectors, such as electric vehicles for the EU and agriculture for China, as leverage in their negotiations. Pork is a strategically important product for both sides: China is the world's largest consumer, and EU farmers export significant quantities of offal products like ears, feet, and snouts, which are highly valued in Chinese cuisine but have little value in other markets. Pork is a strategically important product for both sides: China is the world's largest consumer, and EU farmers export significant quantities of offal products like ears, feet, and snouts, which are highly valued in Chinese cuisine but have little value in other markets. However, the pork investigation is viewed less as a genuine trade concern and more as a bargaining chip in wider trade negotiations. The pork probe is widely interpreted as China's response to the EU's recent decision to impose tariffs of up to 45% on Chinese-made electric vehicles (EVs). Brussels argued the tariffs were necessary to counteract state subsidies and prevent market distortion, as Chinese EV manufacturers rapidly increase their presence in Europe. At the time of their announcement, China sharply criticised the EU's EV tariffs as protectionist, warning of 'necessary measures' to defend national interests, signalling that Tuesday's extension of the pork probe might now be part of a broader strategic play. Key discussions on EV tariffs recently took place in Paris, where Chinese commerce minister Wang Wentao met with EU Trade Commissioner Maroš Šefčovič in talks that covered also broader concerns such as rare earth export controls and public procurement access. At the heart of the negotiations is a potential shift from punitive tariffs to a system of minimum prices for Chinese EVs. This approach aims to address the EU's concerns about unfair competition while avoiding outright trade barriers, potentially serving as a model for future high-tech trade frameworks. 'Negotiations for an agreement on a price undertaking, which would then replace the existing duties we have in place, are continuing at both technical and political level,' a European Commission spokesperson confirmed on Tuesday. This latest clash echoes earlier episodes in China-EU trade relations. Last week, the EU hit back with restrictions on Chinese medical device makers, limiting their access to public procurement contracts in response to Beijing's 'Buy China' policy, which disadvantages EU firms in Chinese markets. All these moves reflect an established pattern of reciprocal measures, with both sides targeting politically sensitive industries to gain a negotiating advantage. Another potential flashpoint is China's restriction of rare earth mineral exports, which are critical components for many EU manufacturing sectors. Though initially aimed at the United States, these restrictions have implications for Europe and are now part of a wider toolkit of Chinese leverage. The EU now hopes that these restrictions will soon be lifted and addressed the topic in Paris' talks last week. 'All we have so far is an indication from the Chinese government via a statement by the spokesperson for their Commerce Ministry that they are indeed looking at this issue and that they're going to find a way to address it,' said a European Commission spokesperson on Tuesday. 'As far as we know, nothing has been formally communicated to us in a structured way,' the spokesperson continued, adding that once the bloc receives such communication, it will need time to assess it. Amid the back-and-forth, there have also been signs of goodwill. China recently expanded market access for certain Spanish food products in an apparent signal that it remains open to negotiation. A crucial milestone in this process is the EU-China summit, now confirmed for the second half of July 2025 in Beijing. Both sides hope it will serve as a platform to recalibrate their economic ties and potentially defuse one of the most complex and consequential trade disputes of the decade. The United Kingdom is placing sanctions on far-right Israeli ministers Bezalel Smotrich and Itamar Ben-Gvir, Foreign Secretary David Lammy announced on Tuesday. Lammy said the ministers had "incited extremist violence and serious abuses of Palestinian human rights." Smotrich and Ben-Gvir will have their assets frozen and face travel bans, a move that is expected to be matched by other international allies as well. In a statement, the UK Foreign Office said they are acting "alongside partners Australia, Canada, New Zealand and Norway." Israeli Foreign Minister Gideon Saar called it an "unacceptable decision" and said the cabinet will meet next week to decide on a response. Smotrich and Ben-Gvir have repeatedly called for Israel to conquer Gaza and re-establish Jewish settlements there. Last month, Smotrich said "Gaza will be entirely destroyed" and has campaigned against allowing aid into the territory. Ben-Gvir has also called for the permanent resettlement of Palestinians from the territory. Referring to the construction of settlements in the occupied West Bank, Smotrich said in a post on X that "Britain has already tried once to prevent us from settling the cradle of our homeland, and we will not allow it to do it again. We are determined to continue building." "Extremist rhetoric advocating the forced displacement of Palestinians and the creation of new Israeli settlements is appalling and dangerous,' the statement from the UK Foreign Office said. It also said that "the rising violence and intimidation by Israeli settlers against Palestinian communities in the West Bank must stop." Settlement growth and construction in the occupied West Bank have been promoted by successive Israeli governments stretching back decades, but it has exploded under Netanyahu's far-right coalition, which has settlers in key Cabinet posts. There are now well over 100 settlements and around 500,000 Israeli settlers sprawling across the area. Rights groups argue that the settlements, illegal under international law, are a hurdle to an eventual two-state solution.

Dortmund sign Bellingham brother Jobe from Sunderland
Dortmund sign Bellingham brother Jobe from Sunderland

France 24

time9 hours ago

  • France 24

Dortmund sign Bellingham brother Jobe from Sunderland

Dortmund announced the signing on Tuesday, the final day of the Club World Cup transfer window. "The England U21 international put pen to paper on a five-year deal with the eight-time German champions on Tuesday morning," Dormund said in a statement. Dortmund reportedly paid a fee of around 33 million euros ($37 million), with five million in additional bonuses, to secure the midfielder's services, the most the club has paid up front for a player. "I'm very happy to be a Borussia Dortmund player now and to fight for titles together with this great club," said 19-year-old Bellingham. "I want to play my part in celebrating success with these great fans here and will work on myself and with the team every day. And I'm very happy that I'll be wearing the black and yellow jersey at the FIFA Club World Cup." Dortmund's transfer record remains the 35 million euros paid to bring Ousmane Dembele from Rennes in 2018 although this was originally 15 million euros which rose by 20 million in sell-on fees once the player transfered to Barcelona. "Jobe is an extremely talented footballer with an impressive level of maturity and intelligence on the pitch for someone so young," said Lars Ricken, BVB Managing Director for Sport. "We have no doubt that he's the perfect fit for our philosophy of developing talented youngsters and giving them the opportunity to improve and establish themselves at the highest level. "His professionalism, his dynamism and his hunger to succeed will make him a real asset for our team." At 19, Jobe is two years younger than his Real Madrid and England midfielder brother. In moving to Dortmund, Jobe will follow in Jude's footsteps of trading the Championship for the Bundesliga and the Westfalenstadion. After leaving Birmingham City, Jude spent three seasons at Dortmund and has become one of the most recognisable players in world football since joining Real in 2023. As he did at Sunderland, the younger Bellingham will wear 'Jobe' on his jersey at Dortmund rather than his last name in a bid to distinguish himself from his brother. Jobe scored four goals and laid on three assists in 40 games for Sunderland this season as he helped the club win promotion to the Premier League. Brotherly face-off Jobe's signing means the two brothers could face off in this season's expanded Club World Cup in the United States, if Dortmund meet Real Madrid during the knockouts of the competition. Jude Bellingham joined Dortmund from boyhood club Birmingham in 2020 aged 17 for around 23 million euros, a fee which rose to 30 million euros when a sell-on fee was added after his 100 million euro move to Real Madrid. He made 132 appearances in yellow and black, scoring 24 times and laying on 25 assists, and helped them win the German Cup in 2021 alongside Erling Haaland and Jadon Sancho. After leaving Dortmund, Jude faced off against his former side in the 2023-24 Champions League final, with Real winning 2-0 at Wembley. Jobe became the second-youngest Birmingham City player behind his brother when he made his debut aged 16 years and 107 days. He was named the young player of the season in the English second flight, again following in his brother's footsteps, five years on. "He's fit as a fiddle and raring to go," said club sporting director Sebastian Kehl. "He's determined to forge his own path at Borussia Dortmund and make his mark on how we play, and we're confident that he will do exactly that," added After a disappointing 2024-25 campaign, Dortmund snuck into fourth after a late-season flurry, picking up 22 of a possible 24 points in their final eight games and will take part in next season's Champions League.

Trade war accelerates major slowdown in global economy since start of 2020s
Trade war accelerates major slowdown in global economy since start of 2020s

LeMonde

time9 hours ago

  • LeMonde

Trade war accelerates major slowdown in global economy since start of 2020s

The trade war launched by Donald Trump has been causing a significant slowdown in global economic growth, according to forecasts released by the World Bank on Tuesday, June 10. The international institution projected that the global economy will grow by 2.3% this year, compared to 2.8% in both 2023 and 2024. This figure is 0.4 percentage points lower than what was forecast back in January. "Only six months ago, a 'soft landing' appeared to be in sight: the global economy was stabilizing after an extraordinary string of calamities both natural and man-made over the past few years," namely the Covid-19 pandemic and the war in Ukraine, said Indermit Gill, the World Bank's chief economist. "That moment has passed. The world economy today is once more running into turbulence. Without a swift course correction, the harm to living standards could be deep." These forecasts are based on the assumption that tariffs will remain at their late-May levels – after Donald Trump's partial backtracking on China and following his agreement with the United Kingdom. Based on these assumptions, the United States will be the first economy affected. Higher tariffs should push up the price of imports and cut into American consumers' spending. According to the World Bank, growth in the world's largest economy is expected to reach 1.4% in 2025, half of the 2.8% recorded in 2024. The eurozone should be less affected, but starting from a much lower base: growth there should be 0.7%, after 0.9% in 2024.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store