German economic sentiment worsened again this month, another signal of weakness in Europe’s largest economy as optimism continues to fade.

Germany’s DAX index is near an all-time high even though the German economy is shrinking. We’re is the disconnect?

Germany's economic sentiment plunged to an 11-month low in September, with the ZEW index dropping sharply. Economic outlook worsened across key German industries, impacting the broader eurozone morale.

A source close to the ministry cited a senior government official as saying it had stopped work on approving export licences for arms to Israel pending a resolution of legal cases arguing that such exports from Germany breached humanitarian law. The ministry did not respond to requests for comment.

Germany plans to take a harder look at whether the weapons it supplies to Israel are not being used in violation of international law, the economy minister, Robert Habeck, said.

Germany has suspended arms exports to Israel due to legal challenges related to violations of humanitarian law, according to Reuters. The German Ministry of Economy reported that in 2023, Germany approved arms exports to Israel amounting to €326.