Reuters reports that German business morale improved further in July after posting a record increase in June, a survey showed on Monday, suggesting that firms expect Europe's largest economy to recover from the coronavirus shock if a second wave of infections is avoided.

The Ifo institute said its business climate index rose to 90.5 from an upwardly revised 86.3 in June. This was the third increase in a row and came in better than economists' expectations for 89.3.

"The German economy is recovering step by step," Ifo President Clemens Fuest said in a statement, adding that firms were notably more satisfied with the current business situation.