For the first time since February, German investors are feeling something unfamiliar: optimism. The ZEW Indicator of Economic Sentiment surged to +10.5 in June 2026, a dramatic reversal from May’s reading of -10.2 and the first positive print in four months.
That’s a 20.7-point swing in a single month. Analysts had expected the index to land around -6. They weren’t even close.
What’s driving the turnaround
The short answer: Iran. Progress in diplomatic negotiations around the Iran conflict has shifted the mood among Europe’s financial class, who had been watching energy prices and inflation anxieties eat into the continent’s economic prospects since tensions escalated in February.
The ZEW survey polls roughly 300 to 350 financial experts from banks, insurers, and corporations across Germany. These aren’t retail investors refreshing their portfolios on a phone. They’re institutional professionals whose six-month economic expectations feed directly into one of Europe’s most-watched sentiment gauges.
