German corporate sentiment unexpectedly rose in November to equal a 15-year high as business expectations and firms' assessment of current conditions improved, a survey said today.
The Munich-based Ifo research institute said its business climate index, based on a monthly poll of around 7,000 firms, rose to 106.8 from 105.3 in October.
The survey posted its second consecutive rise to equal its June reading, which was the highest since February 1991.
Euro zone government bond futures fell, and the euro hit its highest level since early June on the back of the index, bolstering the view that interest rates are headed higher.
The Ifo headline figure was above the mid-range forecast of 66 economists polled by Reuters last week for a fall to 105.2. Forecasts ranged between 104.0 and 106.0.
"These survey results indicate a further continuation of the economic upswing," Ifo said in a statement.
A breakdown of the survey showed the assessment of current conditions had risen to 113.9 from 111.9 in October. The expectations component improved to 100.1 from 99.2.
Analysts were stunned by the improvement in sentiment, which came just weeks before a three percentage point increase in value added tax on January 1st is set to dampen German growth at the start of next year.