German Investor Optimism Rises After French Elect Pro-EU Leader

  • Expectations index climbs to 20.6 from 19.5; est. 22.0
  • ZEW says euro-area economic prospects are gradually improving

German investor confidence rose in May after the election of a centrist president in France reduced the risks for Europe’s largest economy.

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, rose to 20.6 from 19.5 in April. Economists in a Bloomberg survey predicted an increase to 22, according to the median estimate.

German economic growth accelerated to the fastest pace in a year last quarter, and rising factory orders and business confidence suggest momentum is poised to continue. Political uncertainties from neighboring France have diminished after pro-euro Emmanuel Macron was chosen as new leader, while Brexit negotiations and the risk of trade tensions with the U.S. could still cloud the outlook.

“The German economy is in good shape,” ZEW President Achim Wambach said in a statement. “The prospects for the euro zone as a whole are gradually improving, further strengthening the economic environment for German exports.”

ZEW’s gauge for current conditions rose to 83.9 in May from 80.1. A measure for expectations in the euro area advanced to 35.1 from 26.3.

— With assistance by Kristian Siedenburg, and Andre Tartar

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