The ZEW Center for European Economic Research released its economic sentiment index for Germany and the Eurozone on Tuesday. Germany's ZEW economic sentiment index increased to 34.9 in December from 11.5 in November, exceeding expectations for a rise to 19.8. That was the highest reading since May 2014.

The ZEW President Clemens Fuest said that "confidence in the German economy seems to be slowly returning". The improvement of sentiment was driven by a weak euro and falling oil prices, Fuest noted.

The ZEW president pointed out that "the current optimism is fuelled by factors that might change even over the short term".

Eurozone's ZEW economic sentiment index fell to 10.0 in December from 11.0 in October, missing expectations for a gain to 20.1.