Eurozone ZEW sentiment turns positive for first time since February

Eurozone ZEW economic sentiment surged to 9.5 in June from -9.1, its first positive reading since February, far exceeding the -7.2 forecast.mitrade
The rebound followed the US-Iran framework deal announced Sunday, which sent oil prices sharply lower and lifted global equity markets.bbc
Germany’s ZEW sentiment also turned positive at 10.5, though analysts warn recovery will take months as energy flows normalize.mitrade

Eurozone Investor Sentiment Surges Into Positive Territory in June ZEW Survey

Investor confidence in the eurozone swung sharply higher in June, with the ZEW Indicator of Economic Sentiment climbing 18.6 points to 9.5, according to data released Tuesday by the Centre for European Economic Research. The reading marks the first time the indicator has entered positive territory since February 2026 and far exceeded market expectations of -7.2.mitrade

Peace Deal Drives Optimism

The turnaround follows the announcement over the weekend that the United States and Iran had reached a framework agreement to end their nearly four-month conflict, a development that sent oil prices tumbling and global equity markets rallying. President Donald Trump declared the deal on Truth Social on Sunday, stating he had “authorized” the reopening of the Strait of Hormuz, while Iran’s Supreme National Security Council confirmed the finalization of a memorandum of understanding. Pakistan, which mediated the talks, announced that a formal signing ceremony is scheduled for Friday in Switzerland.aljazeera

The prospect of normalizing energy flows through the Strait of Hormuz — through which a substantial share of the world’s oil supply passes — has driven expectations that the inflationary pressures weighing on Europe since the conflict began in February could ease in the months ahead. Brent crude fell more than 5% on Monday to around $83 per barrel, its lowest level since early in the conflict.bbc

Germany Also Rebounds

Germany’s own ZEW economic sentiment index turned positive as well, rising to 10.5 from -10.2 in May, beating forecasts of -6.0. However, the assessment of Germany’s current economic situation worsened, with that sub-index falling to -81.0 from -77.8.mitrade

The improvement in forward-looking sentiment had been anticipated by some analysts. Ebury, the London-based fintech, wrote on Monday that “the ZEW economic survey may see the first uptick on peace news optimism,” calling the US-Iran deal “an unambiguous positive for both the Eurozone economy and the common currency”.ebury

Cautious Recovery Ahead

Despite the sharp rebound in sentiment, analysts caution that the eurozone economy faces a difficult path back to normal. The European Commission forecast in May that eurozone GDP growth would slow to 0.9% in 2026 as the Middle East conflict fueled inflation, while energy experts have warned it could take months for oil and gas flows through the Strait of Hormuz to fully normalize due to mine clearance and infrastructure challenges. The ZEW data for May had already shown a tentative improvement, with the eurozone indicator rising 11.3 points to -9.1 as investors began pricing in hopes of a resolution to the conflict.aljazeera