Confidence among German financial players picked up slightly in February, a regular survey showed Tuesday, but remained in negative territory as clouds hang over the global economy.
The ZEW institute's economic expectations index for the coming months added 1.6 points to reach -13.4, its highest level since September last year.
But a separate ZEW index tracking present economic conditions in Germany tumbled 12.6 points, to 15.0.
"There have been disappointing developments in the business cycle especially in the industrial sector," ZEW chief Achim Wambach said in a statement.
"Industrial production sank again, new orders are faltering and there are no new impulses from foreign trade," Wambach said, adding that this pointed to "no expectation for a fast correction". Germany's economy has been battered by several one-off blows in recent months, including low water slowing shipping in the Rhine river and new emissions tests proving a bottleneck for the crucial car industry.
But geopolitical storms have also lashed Europe's powerhouse, as a US-China trade war and the threat of escalation in Washington's transatlantic faceoff with Brussels stoked uncertainty. Sources told AFP on Monday that a US Commerce Department report handed to President Donald Trump labelled European car imports a national security threat to America.