US-Iran peace deal lifts German investor confidence in June

BERLIN — Investor confidence in Germany rebounded sharply in June, with the ZEW Economic Sentiment Index rising 19.8 points to 10.5 from a negative reading in May. Analysts polled by FactSet had expected a more limited increase that would have kept the index in negative territory. ZEW President Achim Wambach said financial market experts forecast that the conflict with Iran is drawing to a close, which would ease pressure on energy prices and inflation and support energy-intensive sectors and households while strengthening domestic demand. The uncertainty created by the war had dealt an additional blow to the German economy, which has long been struggling to recover. Despite the government's heavy spending plans, growth forecasts for this year had been revised downward because of the conflict. The peace agreement came after a war that began in late February with US and Israeli strikes on Iran, improving the outlook for Europe's largest economy. The jump in the survey showed that investors in Germany, one of Europe's most exposed economies to energy costs and global risks, responded quickly to signals of a return to normalcy.