In its latest survey of economists, the ZEW institute reported some of the gloom recently clouding the Eurozone’s largest economy appears to be lifting. The sentiment index jumped from -44.1 to -22.5 in September, beating forecasts for a more modest rise to -37 and reflecting a more optimistic outlook for the US-China trade war than investors expected. However, despite the more sanguine outlook from economists, Germany still faces significant economic headwinds.

ZEW President Achim Wambach said: “The rise of the ZEW Indicator of Economic Sentiment is by no means an all-clear concerning the development of the German economy in the next six months. The outlook remains negative.”

Meanwhile, Brexit politics held the gaze of Sterling investors today and saw the pound struggle to find any momentum.

The UK Supreme Court has embarked on a three-day hearing in which judges will decide whether Prime Minister Boris Johnson acted unlawfully when he prorogued parliament.

The court’s findings could have a significant bearing on the direction of Brexit, with an unlawful verdict likely to result in the reconvening of parliament.

This, in turn, would provide a new window for opposition MPs to challenge the government over its hard-line Brexit approach.

Still to come this week, the UK’s CPI figures could drag on the pound as economists forecast a slight slowdown in August inflation, while the Bank of England’s latest policy decision is due on Thursday.

Policy changes are unlikely, but the central bank could offer its latest take on Brexit which could then have an influence on Sterling sentiment.

The publication of the Eurozone’s own CPI figures may weigh on the euro tomorrow if they show inflation holding at a two-year low for August.

The Eurozone’s latest consumer confidence figure will then close out the week and could also exert some pressure on the single currency if September household expectations continued to deteriorate.

source: express.co.uk

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