German business morale improved for the first time this year in August as a trade truce between the European Union and United States made company executives less concerned about a transatlantic trade war.
The Ifo economic institute said on Monday its closely-watched business climate index jumped to 103.8, beating July’s reading of 101.7 and a Reuters consensus forecast of 101.9.
U.S. President Donald Trump agreed during a meeting with European Commission President Jean-Claude Juncker last month to refrain from imposing tariffs on European cars while the two sides negotiate to cut other tariffs.
“The truce between Juncker and Trump is clearly providing relief,” Ifo economist Klaus Wohlrabe told Reuters, adding that export expectations in Europe’s largest economy had risen significantly after dropping in July.
The August reading was the highest since February and marked the strongest monthly improvement since December 2014.