ECB cash splash sees confidence surge in Germany
GERMAN investor sentiment soared by a record amount this month as chief executives and analysts gave an enthusiastic welcome to the European Central Bank's massive injection of cash on the markets last month which left financial institutions awash with money.
The influential ZEW sentiment index rose to -21.6 from -53.8, the largest single monthly increase since the survey of 300 investors and analysts started in 1991. The news drove the euro higher against the dollar.
The Mannheim-based ZEW think tank partly attributed some of the surge to optimism over Europe's policy response to the European debt crisis which saw the ECB provide banks with nearly half a trillion euros of cheap three-year loans which appear to be encouraging banks to lend to one another and buy sovereign bonds.
Germany has also shown more resilience to troubles elsewhere in the eurozone, after fiscal prudence, steady demand for its high-quality products and high competitiveness helped it weather the tough global environment. VW said last week that car sales rose 9pc in December.
Germany's export-driven economy recovered quickly from the financial crisis, but began to feel the pinch late last year as the Greek debt crisis spread to its trading partners.
Overall, Germany's gross domestic product grew 3pc last year, although it did shrink in the final quarter. Joblessness is at the lowest level since reunification two decades ago.