The ZEW research institute's gauge of investor confidence in Germany rose higher than expected in January amid positive sentiment about Christmas retail sales.
The think tank said today that its January expectations indicator, based on a survey of 305 analysts and institutional investors, rose to 26.9 from 14.4 in December.
"A key reason for the greater confidence among analysts could have been the optimistic expectations in the German retail sector after the good Christmas sales," ZEW said in a statement.
A separate gauge of current conditions strengthened to minus 61.2 from minus 64.2, while a measure of expectations for the 12-nation euro zone rose to 29.9 from 17.7.
The ZEW survey gives a pointer to the direction of the Ifo institute's closely watched measure of business sentiment, seen as a more important indicator of the health of the German economy.
Munich-based Ifo is due to publish the results of its latest survey on January 26th.