Germany investor sentiment gains

Bloomberg

German investor confidence rose to an eight-month high in January, setting an optimistic tone for Europe’s largest economy in 2018.
The ZEW Center for European Economic Research in Mannheim said that its index of investor expectations increased to 20.4 from 17.4 in December. Economists in a Bloomberg survey predicted a gain to 17.7.
Germany’s economy has been enjoying a strong run, supported by domestic spending and solid global trade, and saw the strongest expansion in 2017 since 2011.
The Bundesbank says the momentum is likely to continue, and the country’s benchmark stock index has rallied in recent weeks to reach an all-time high. Companies in the manufacturing sector are seeing particular strength, as activity rose to a record level in December 2017.
“The latest survey results reveal an optimistic outlook for the German economy in the first six months of 2018,” ZEW President Achim Wambach said, adding that private consumption is likely to be a key driver of growth. The assessment of the economic environment in Europe and the US. “is also much more favourable than it was at the end of 2017.”
Some European Central Bank officials have expressed concern that the gains may weigh on inflation, which remains well below 2 percent. Others have pushed for an unwinding of unprecedented stimulus. The Governing Council is set to meet for its first policy update of 2018 on Thursday.
While economists expect officials to hold off on any major changes, according to estimates in a Bloomberg survey, this year could see quantitative easing being phased out by the end of the year if momentum remains strong.