German managers again expressed optimism about the coming six months but said the present situation has worsened, a stance that has reheated recession warnings for Europe’s largest economy.

The headline business climate index for Germany compiled by the country’s Ifo economics institute advanced to 91.1 points – a fifth consecutive increase – which beat the downwardly revised 90.1 reading from January but fell short of the 91.2 market estimate.

This was second month in a row that the headline reading was below the consensus forecast, and it was the second straight time the current conditions component of the index declined unexpectedly, with this month's reading falling to 93.9, well short of the 95.0 estimate and 94.1 in January.

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Federal Reserve officials could shed light on how many policymakers saw the case for a larger interest-rate increase at their last meeting and whether they anticipated the need to take rates higher than previously thought to tame persistently high inflation.

US central bankers will publish minutes at 2 p.m. Wednesday of their Jan. 31-Feb. 1 gathering, at which they voted unanimously to raise rates by just a quarter percentage point. 

That was a moderation from their half-point hike in December after four consecutive jumbo-sized 75 basis-point increases. The action brought the Fed’s benchmark policy rate to a target range of 4.5% to 4.75%. 

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Deutsche Bank has lifted its forecast for where the European Central Bank's key rate will rise to in this tightening cycle to 3.75% from 3.25%, the German bank said in a note on Wednesday.

Deutsche economists now expect the ECB to raise interest rates by 50 basis points (bps) at its March and May meetings, followed by a final hike of 25bp in June. They had previously expected a 50 bps hike in March and a final 25 bps rise in May.

A more resilient economy and jobs market alongside hawkish central bank rhetoric was behind the forecast change, the note said.

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Citigroup economists on Wednesday raised their global growth forecast slightly and see a "less hard" landing but still expect the world's economy to grow at the slowest pace in 40 years.

The Wall Street brokerage now sees global growth slowing this year to about 2.2%, 0.25% higher than their previous estimate due to improving macroeconomic trends, it said in a note by economists led by Nathan Sheets.

Citigroup said its cautious pessimism is due to China's stronger and clearer economic outlook than previously estimated, stagnation in the euro area as opposed to a contraction estimated earlier and resilience in the United States.

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