German economic sentiment rises more than forecast

German economic sentiment rose more than forecast in November, in a positive sign for the euro-area amid a weak economy and low inflation.

ZEW's confidence index jumped to 11.5 from -3.6 in October, more than the 0.5 expected by analysts.

The data comes after European Central Bank (ECB) President Mario Draghi on Monday said that buying government bonds was a possible solution if needed to address the stagnant Eurozone economy.

"November’s rise in German ZEW financial investor sentiment is a relief, although the index remains at a fairly low level," said Jennifer McKeown, senior European economist at Capital Economics.

"The increase, from -3.6 to +11.5, was much better than the consensus forecast of a rise to +0.9 and probably reflected the softening of the euro, hints of ECB QE and an easing of concerns over geo-political factors."

While McKeown said the report was an encouraging indication that the recovery will resume, the market should be wary of placing too much weight on one monthly increase in a volatile survey.

The headline index remains below its long-run average of +24.5 and therefore consistent with only a modest recovery, she said.