• Prior 87.6
• Current conditions 86.7 vs 86.3 expected
• Prior 85.7
• Expectations 90.5 vs 90.3 expected
• Prior 89.5; revised to 89.6

The headline reading is a six-month high as German business morale picks up in the early stages of the new year. That comes alongside an improvement in both the current conditions and expectations/outlook index. The recent optimistic recovery in the German industry is definitely helping to provide a lift to broader sentiment.

So far, it’s all been quite good news out of the euro area to start the year. And this sort of reading exemplifies the optimistic turn we’re seeing in the German economy especially. Stagflation fears had been a real concern at some point last year but perhaps there is the potential for things to turn around now.

It’s still a little early but if the industrial sector can keep it up, there’s scope for Germany to really get out of the mud this year. But as seen with the recent trade debacle since Friday, US tariffs will prove to be a curveball on how things might progress in the months ahead.