German Economic Sentiment Plunges Amid US Trade Policy Concerns; ECB Rate Cut Anticipated

Germany's economic sentiment sharply declined in April, hitting a near two-year low, according to the ZEW Economic Sentiment survey. The indicator fell to -14 points, from 51.6 in March. This decline, the steepest monthly drop since March 2022, reflects concerns over U.S. trade policy and its impact on export-heavy industries, including automobile, chemical, metal, steel, and mechanical engineering sectors. The Eurozone sentiment also decreased to -18.5 points. Despite this, financial market experts do not foresee a significant inflation risk, potentially allowing the ECB room for interest rate cuts. European stock markets rose, with the German DAX leading gains, up 1.6%. The euro remained stable at $1.1340.