German ZEW Economic Sentiment Index jumps to 26 in February vs. 15.5 expected

• Germany’s ZEW Economic Sentiment Index climbed to 26 in February.
• EUR/USD holds losses above 1.0450 after German and Eurozone ZEW surveys.

The headline German ZEW Economic Sentiment Index jumped to 26 in February from 10.3 in January, beating the market forecast of 15.5 by a wide margin.

The Current Situation Index improved to -88.5 in the same period, compared with January’s -90.4. Data beat the estimated -90 print.

The Eurozone ZEW Economic Sentiment Index came in at 24.2 in February versus 18 in January. The market expectations was for a 24.3 figure.

Key points

Rising optimism is probably due to hopes for a new German government capable of action.

After a period of absent demand, private consumption can be expected to gain momentum in the next six months.

The recent move by the ECB to cut interest rates in response to sluggish economic activity in the monetary union is likely to have contributed to the better outlook for the construction industry.

Market reaction

The EUR/USD pair remains under selling pressure after the mixed German and Eurozone ZEW surveys. The pair is losing 0.16% on the day to trade near 1.0460, as of writing.