Germany: Germany's economic sentiment saw a significant improvement in June, driven by investor optimism regarding the potential resolution of the Iran conflict, which is anticipated to alleviate pressure on energy prices and inflation, as reported by the Leibniz Centre for European Economic Research (ZEW) on Tuesday.

According to Anadolu Agency, the ZEW Indicator of Economic Sentiment for Germany surged by 20.7 points from the previous month, reaching 10.5 in June. This marks a return to positive territory following a slump in the spring, surpassing market expectations of minus 5.8 points. ZEW President Achim Wambach indicated that experts believe the Iran conflict is nearing its end, which could result in reduced pressure on energy prices and inflation. This reduction in price pressures would benefit energy-intensive industries and private households, thereby bolstering domestic demand.

Despite the optimistic outlook, the assessment of Germany's current economic situation deteriorated. The current conditions indicator dropped by 3.2 points from May to minus 81, indicating that analysts still perceive weak near-term conditions in Europe's largest economy.

The improved outlook was evident across several sectors. The automotive industry balance increased by 21.9 points after experiencing several months of decline, while expectations for the chemical and pharmaceutical industries rose by 16 points. The mechanical engineering sector also showed improvement, with a rise of 9.2 points, and expectations for private consumption climbed by 11.7 points from the previous month. However, ZEW noted that balances for these sectors remained negative despite the strong monthly increases.

The construction sector was a notable exception, with its balance falling by 15.2 points to minus 12. ZEW attributed this decline to the European Central Bank's recent rate hike, which likely impacted the sector's outlook.

In the broader eurozone, economic sentiment also improved significantly in June. The eurozone expectations index increased by 18.6 points from May to 9.5 points. However, the assessment of the current economic situation in the eurozone remained negative, declining by 2 points to minus 43.4.