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The German ZEW investor confidence survey for May jumped to 31.1 from 13.0 in the previous month. This was much better than our median of 20 and the highest reading since June 2006. The sixth consecutive month of improvement confirms that confidence is bottoming out and that economic activity will start to stabilize in the second half of the year. The reading is now firmly in positive territory, which indicates that optimists far outnumber pessimists. Bund futures fell to intraday lows on the reading with the June 10-year future falling to 120.53 before recovering slightly again. Data will back the arguments of those at the ECB who are against further cuts in the refi rate and an extension of the bond purchase program.
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