Latest news with #ZEW
Yahoo
13-05-2025
- Business
- Yahoo
German investors cheered by tariff talks, new government
German investor sentiment has jumped, buoyed by rollbacks of US tariffs, and the formation of a new national government, a closely-watched survey showed Tuesday. Market expectations for Europe's biggest economy over the next six months rose 39.2 points to sit at plus 25.2, clawing back much of the ground lost in a calamitous April fall, according to the May release of the ZEW survey. On April 2, US President Donald Trump imposed swingeing tariffs before pausing many of them for 90 days and entering negotiations after markets worldwide plunged. Achim Wambach, head of the ZEW institute, said the returned optimism was down to "the formation of a new government and movement in the tariff disputes". Trump has brought down an initial 20-percent tariff on EU imports to to 10 percent, and senior US and Chinese officials on Monday announced agreement to drastically lower sky-high tariffs on each other. Almost all German sectors experienced a rise in confidence, the survey showed, but optimism grew fastest in export-intensive industries such as steel and chemicals. The United States was Germany's top trading partner last year and a major market for its exports, which range from cars to machinery and chemicals. When it came to the domestic situation in Germany, investor sentiment remained negative and was down slightly on April's reading, to reach minus 82 points, a fall of 0.8 points. Germany's economy has shrunk for the past two years, hit by lukewarm demand for its exports in the face of patchy global growth and increasingly fierce Chinese competition, as well as high energy prices. Some economists hope that substantial infrastructure spending and reforms under the new governing coalition led by Friedrich Merz can help get the economy back on its feet. More than 190 analysts and institutional investors took part in the ZEW survey. vbw/rmb Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
German economic sentiment rebounds in May as tariff fears ease
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. Related Bayer shares soar as company records strong cancer drug demand 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
German economists predict third year of recession due to US tariffs
Germany's economy is set to contract by 0.2% this year and slip into recesssion for a third consecutive year, according to a new forecast by the Cologne-based German Economic Institute (IW). The country is particularly affected by the ongoing trade conflict triggered by the US government's tariffs, the IW noted. Global uncertainties that are discouraging businesses from making investments are contributing to the downturn, with declines in major purchases such as new machinery and vehicles, it said. High operating costs in Germany further complicate the situation, according to the IW. Germany has seen two consecutive years of recession, with gross domestic product (GDP) having shrunk by 0.2% in 2024. Expectations slightly improved Meanwhile, economic expectations among German financial experts were much more optimistic in May than initially predicted, according to another survey. The Centre for European Economic Research (ZEW)'s economic sentiment index rose by 39.2 points compared to the previous month to +25.2 points. Economists had expected a significantly lower increase on average. "The formation of the new German government, the movement in the customs disputes and a stabilizing inflation rate are contributing to the increased optimism," said ZEW President Achim Wambach. On the other hand, the already very negative assessment of Germany's current economic situation slightly deteriorated again, with the corresponding value dropping by 0.8 points to -82 points. Economists had expected an improvement to -77 points. US trade policy biggest risk US trade policy poses the biggest risk to the global economy this year, according to the IW. Without the US tariff policy, global economic output in 2025 could be up to 0.8% higher, the institute said. The outlook for both Germany's industrial and construction sectors remains grim. Industrial companies are expected to generate less added value this year, following a 3% decline in 2024. High energy prices, rising wages and increasing regulation are placing additional pressure on businesses. After a 3.7% drop in 2024, construction companies are facing further constraints this year, with high construction costs driven by regulation continuing to hinder the sector. The IW has also observed that these trends are now affecting the labour market, with the number of people employed declining since mid-2024. By the summer, the number of unemployed people could reach 3 million, a level not seen since 2010, the economists said. Michael Grömling, head of macroeconomic research at the IW, said Germany's new government now has the opportunity to reverse the trend, pointing at the country's planned special infrastructure fund that could help stimulate the economy.
Bloomberg
13-05-2025
- Business
- Bloomberg
German Investor Confidence Jumps on Progress Over Tariffs
Investor confidence in Germany's economy improved as the initial shock from US tariffs fades and a new government prepares to boost public spending. An expectations index by the ZEW institute climbed to 25.2 in May from -14 the previous month. Analysts in a Bloomberg survey had expected an increase to 11.3. A measure of current conditions unexpectedly edged lower.
Int'l Business Times
13-05-2025
- Business
- Int'l Business Times
German Investors Cheered By Tariff Talks, New Government
German investor sentiment has jumped, buoyed by rollbacks of US tariffs, and the formation of a new national government, a closely-watched survey showed Tuesday. Market expectations for Europe's biggest economy over the next six months rose 39.2 points to sit at plus 25.2, clawing back much of the ground lost in a calamitous April fall, according to the May release of the ZEW survey. On April 2, US President Donald Trump imposed swingeing tariffs before pausing many of them for 90 days and entering negotiations after markets worldwide plunged. Achim Wambach, head of the ZEW institute, said the returned optimism was down to "the formation of a new government and movement in the tariff disputes". Trump has brought down an initial 20-percent tariff on EU imports to to 10 percent, and senior US and Chinese officials on Monday announced agreement to drastically lower sky-high tariffs on each other. Almost all German sectors experienced a rise in confidence, the survey showed, but optimism grew fastest in export-intensive industries such as steel and chemicals. The United States was Germany's top trading partner last year and a major market for its exports, which range from cars to machinery and chemicals. When it came to the domestic situation in Germany, investor sentiment remained negative and was down slightly on April's reading, to reach minus 82 points, a fall of 0.8 points. Germany's economy has shrunk for the past two years, hit by lukewarm demand for its exports in the face of patchy global growth and increasingly fierce Chinese competition, as well as high energy prices. Some economists hope that substantial infrastructure spending and reforms under the new governing coalition led by Friedrich Merz can help get the economy back on its feet. More than 190 analysts and institutional investors took part in the ZEW survey.
