Germans are feeling much better than expected about their economy, with the just-released ZEW sentiment index giving a reading of 42, up from 36.3 in July.

The Zew Institute’s Current Conditions Index rose even more – to 18.3 from 10.6 in July.

Analysts expected readings of 40 and 12 respectively for the two indices and sentiment is at its highest since March.

The institute comments that the “first signs of an end to the recession in important Eurozone countries may have contributed to the indicator’s rise…. furthermore, the economic optimism is supported by the robust domestic demand in Germany”.

There has also been a strong increase in economic expectations for the Eurozone, the index climbing 11.2 points to 44.

Eurozone industrial production numbers for June are also out. They show an increase of 0.7 per cent, compared to economist expectations of 0.8 per cent and a decline of 0.3 per cent in May.