The Germans had already occupied Sighet, "yet the Jews of Sighet continued to smile." Why?

The quote that you are referencing is from Elie Wiesel's seminal work on the Holocaust titled Night. The passage is from page 10:

The Germans were already in our town, the Fascist were already in power, the verdict was already out--and the Jews of Sighet were still smiling. Night, Page 10

Wiesel begins his study with the impact of the Germans marching into his hometown of Sighet. While the Jewish population was clearly concerned and in fear about the Nazi penetration of Hungary, something happened when the members of his hometown met the Germans. The Nazis seemed to do no harm to the Jewish population at first. They lived among the Jews and were at times quite charming. The optimistic Jews in the town even mocked those that were concerned about the Germans earlier:

Three days after he (the German officer) moved in, he brought Mrs. Kahn a box of chocolates. The optimists were jubilant: "Well? What did we tell you? You wouldn't believe us. There they are, your Germans. What do you say now? Where is their famous cruelty?"  Night, Page 10

As you can see, the reason that the Jews of Sighet were smiling is because the Germans were not cruel to them at first. In another act of evil, they wanted the tormented Jews to trust them.