- ZEW expectations index climbs to 4.3 in March from 1
- Earlier report showed German business confidence improving
German investor confidence rebounded from a 16-month low after market turmoil calmed and the European Central Bank announced fresh euro-area stimulus.
The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months ahead, advanced to 4.3 in March from 1 in the previous month. Economists predicted an increase to 5.4, according to a Bloomberg survey. An earlier report showed German business confidence also rose.
The ECB this month announced interest-rate cuts, more bond purchases and a potential subsidy to lenders in a renewed bid to quash the threat of deflation. Bank-led equity sell-offs have eased, reducing the risk that lenders will pull back and choke off a fragile recovery.
“We saw some stabilization in the equity and other financial markets help improve sentiment,” Ralph Solveen, an economist at Commerzbank AG in Frankfurt, said before the report. “The turbulence has come down in part due to expectations that the ECB would do more.”
ZEW’s measure of current conditions slid to 50.7 in March from 52.3. A gauge of expectations for the euro area dropped to 10.6 from 13.6.
Germany’s DAX Index has climbed more than 12 percent since mid-February, and equities in most major markets have picked up.
The nation’s economy is also holding up despite concerns over weaker export demand from China and other emerging markets. The Munich-based Ifo institute’s business climate index rose to 106.7 in March from 105.7 the previous month, a report showed on Tuesday. That topped the median estimate of 106 in a Bloomberg survey of economists.
Economic growth in the euro area probably picked up at the end of the first quarter, according to Markit Economics. Its composite Purchasing Managers Index of manufacturing and services rose to a three-month high of 53.7 in March from 53 in February. That keeps the measure well above the 50 level that separates expansion from contraction, though output prices fell.