Eurozone Investor Confidence Lowest In Over 4 Years

Eurozone investor confidence weakened for a sixth straight month in February to its lowest level in over four years, as the assessment of the current economic situation worsened further, while the pessimism regarding the outlook lessened, survey data from Sentix showed on Monday.

The investor confidence index for the euro area dropped to -3.7 from -1.5 in January, the Frankfurt-based behavioral research institute showed on Monday. The latest reading was the lowest since November 2014. Economists had forecast an improvement to -1.3.

The current conditions index fell to 10.8 from 18, marking the weakest score since December 2016. The measure declined for a sixth month in a row. The expectations index rose to a three-month high of -17.3 from -19.3.

While the indexes may improve slightly, there was not enough to proclaim a turnaround, Sentix said.

Germany’s investor confidence index fell for the fourth consecutive month to 3.1, which was the lowest level since August 2012.

“A major reason for this development is likely to lie more and more in the approaching Brexit,” Sentix said. “The economy now has to deal with the contingency plans in view of the unresolved political situation.”

In January, the closely-watched Ifo German business confidence index fell for a fifth successive month to its lowest level in nearly three years as firms grew more worried about the impact of a chaotic no-deal Brexit and further escalation of the global trade tensions.

Several companies exposed to UK-EU trade are currently not aiming for growth, but only for stability in the coming months, the think tank noted. For the second half of the year, the majority of investors have not yet assumed that the Eurozone economy will slide into recession, Sentix added.

Investors are now looking for some easing measures from central banks, Sentix said.

The Sentix report also showed that investor confidence improved in the US, Japan as well as globally.

The latest Sentix survey was conducted between January 31 and February 2 among 1,004 investors, of which 274 were institutions.

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