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German investor sentiment rises on trade developments, ZEW reports

German investor sentiment rises on trade developments, ZEW reports
The skyline with its banking district is photographed in Frankfurt, Germany, August 13, 2019. REUTERS/Kai Pfaffenbach -
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KAI PFAFFENBACH(Reuters)
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BERLIN (Reuters) – The mood among German investors improved more than expected in November, a ZEW survey showed on Tuesday, with the research group pointing to a more favourable outlook for Europe’s biggest economy after recent developments in trade conflicts.

ZEW said its monthly survey showed economic sentiment among investors jumped to -2.1 from -22.8 in October. Economists polled by Reuters had expected an improvement to -13.0.

A separate gauge measuring investor assessments of the economy’s current conditions edged up to -24.7 from -25.3 in the previous month. Analysts had predicted a reading of -22.0.

“There is growing hope that the international economic policy environment will improve in the near future, which explains the sharp rise in the ZEW Indicator of Economic Sentiment in November,” ZEW President Achim Wambach said.

U.S. punitive tariffs on car imports from the European Union have become less likely, and an agreement in the trade conflict between the United States and China is appearing more likely, Wambach said.

“In the meantime, the chances for an agreement between Great Britain and the EU and thus for a regulated withdrawal of Great Britain have noticeably increased,” he said.

The German economy shrank by 0.1% in the second quarter, when household spending and state consumption were not enough to offset sluggish exports. Data due on Thursday is expected to show another contraction in the third quarter. That would mean that the German economy entered a technical recession.

U.S. President Donald Trump is scheduled on Tuesday to discuss his trade policy during a lunch time address at the Economic Club of New York.

The speech will be closely watched by investors searching for any encouraging news about his administration’s long-running trade war with China and his repeated threats to increase import tariffs on European cars and vehicle parts.

(Reporting by Michael Nienaber; editing by Thomas Seythal, Larry King)

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