FX.co ★ Eurozone Sentix Investor Confidence Rises For 7 Straight Months

Investor confidence in the Eurozone has been on the rise for seven consecutive months, achieving its highest level since February 2022, according to a survey conducted by the behavioral research institute Sentix. The investor confidence index was recorded -3.6 in May, surpassing its forecast, which originally anticipated a moderate rise to -4.8 from -5.9 from the previous month.

Additionally, May's current situation index advanced to -14.3 from -16.3, the highest since May 2023. The expectations indicator also experienced a 27-month high increase of 7.8, from 5.0 in April. Sentix stated that these trends represent steady progress in the right direction; however, they also mentioned that the pace of recovery continues to be weak as improvements in expectations are progressing slowly and only minimally impacting overall situation values.

Regarding the European Central Bank, Sentix commented that the opportunity for reducing key interest rates is rather limited. As the economy strengthens, the inflation environment is simultaneously worsening, leading to increased pressure on bond markets.

Furthermore, German investor sentiment displayed signs of improvement in May, largely due to the global economic recovery. Even though the economic expectations have now transitioned from negative to neutral, the situation remains weak, according to the survey results. The German investor confidence index rose to -17.5 in May, up from -20.5 in April, whereas the current situation index stood at -33.5 compared to -36.0 from last month. The expectation index also rose to zero from -3.5 in April.

Commenting on the weak economic momentum, Sentix labeled it as unstable, expressing hope that German policymakers do not suppress this fragile spark of optimism.