German investor sentiment improves in March - ZEW

German investor sentiment improved in March, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.

The headline ZEW investor expectations index rose to 76.6 from 71.2 in February, coming in ahead of consensus expectations for a reading of 74.0.

Meanwhile, the current situation index printed at -61.0 in March compared to -67.2 the month before.

ZEW President Professor Achim Wambach said: "Economic optimism continues to rise. Experts expect a broad-based recovery of the German economy. They anticipate that at least 70% of the German population will be offered a vaccine against Covid-19 by autumn.

"However, a large majority also expects inflation to continue to grow, as well as higher long-term interest rates."

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "These data are in line with the Sentix reported earlier. The further increase in expectations is consistent with market pricing reflecting a reality in which the virus is history and economic activity is quickly moving towards pre-virus level. In this context, the sub-par vaccination effort isn’t a huge challenge for the overall trend - Germany and the EU will get there in the end - and remember also that the pace of vaccination has accelerated significantly in the past month.

"In addition, we also suspect EZ financial markets, especially equities, are now looking forward to a significant lift from stronger global growth, primarily driven by a stimulus-boosted and fully vaccinated US economy. It could be very tasty indeed for EZ exporters, many of which are key constituents in German and EZ large cap equity indices. Meanwhile in the near term, conditions will remain difficult somewhat at odds with a rising current situation index, though in fairness, this gauge is still consistent with an overall depressed short-term outlook."