German Investor Confidence Jumps on Iran Conflict Resolution

The ZEW Indicator, which tracked the expectations of 190 analysts and investors, significantly surpassed economists' consensus expectation of remaining in negative territory at minus 8.0. Respondents were surveyed between June 8 and 15, a period that overlapped with news of a U.S. and Iran agreement to end military action.

ZEW President Achim Wambach stated that the expected easing of energy prices and inflation would benefit German industry and households, thereby strengthening domestic demand. Despite returning to positive figures for the first time in four months, the indicator remains well below its February peak of 58.3, having slumped after the war's outbreak.

The ZEW survey showed brightening expectations for Germany's automotive sector and the chemical and pharmaceutical sector, both key energy-intensive industries. However, the outlook for the construction sector retreated, which ZEW attributed partly to the European Central Bank's interest-rate hike earlier this month.

Germany, as a net energy importer, is particularly exposed to spikes in oil and natural-gas costs, such as those caused by the closure of the Strait of Hormuz.