German Investor Confidence Rises in Sign of Optimism for Economy

  • Expectations gauge climbed to 13.8 in November; estimated 8.1
  • ZEW says optimism on outlook was reined in after U.S. election

German investor confidence rose in a sign of optimism amid renewed economic uncertainty after Donald Trump’s surprise victory in the U.S. presidential election.

The ZEW Center for European Economic Research in Mannheim said on Tuesday that its index of investor and analyst expectations, which aims to predict economic developments six months ahead, climbed to 13.8 in November from 6.2 the previous month. Economists in a Bloomberg survey predicted an increase to 8.1.

While data earlier in the day showed that German growth cooled more than estimated last quarter, there are also signs that Europe’s largest economy is regaining its momentum with business confidence at a two-year high in October and joblessness at a fresh record low. Moreover, global financial markets have rallied since the election of Trump last week as investors bet that he’ll follow through on a pledge to unleash a wave of fiscal stimulus.

Still, Bundesbank President Jens Weidmann warned after the vote that heightened uncertainty, including the U.K.’s decision to leave the European Union, is weighing on the global outlook. That’s a risk to Germany’s export-oriented economy.

“The renewed increase is indicative of a stronger economic growth in the coming six months,” ZEW President Achim Wambach said in a statement. “The election of Donald Trump as U.S. President and the resulting political and economic uncertainties, however, have made an impact. After the election, the economic sentiment has been less positive than before.”

ZEW’s gauge for current conditions slipped to 58.8 in November from 59.5. A measure for expectations in the euro area advanced to 15.8 from 12.3.

Germany’s gross domestic product rose a seasonally-adjusted 0.2 percent in the three months through September, the Federal Statistics Office in Wiesbaden said on Tuesday. That’s below the 0.3 percent forecast in a Bloomberg survey of economists, and follows an expansion of 0.4 percent in the second quarter.

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