FX.co ★ Eurozone Investor Sentiment Improves For Second Month - Sentix

Investor confidence in the eurozone saw an uplift for the second consecutive month in November, buoyed by modest economic improvements in Germany and optimism surrounding the U.S. presidential election outcome. Meanwhile, markets remain keenly interested in potential stimulative measures from China, as indicated by the latest Sentix survey results released on Monday.

The Sentix investor confidence index for the Eurozone rose to -12.8 in November from -13.8 in October, according to the behavioral research think tank. This was slightly above economists' expectations, who had predicted a score of -12.7.

The current situation index of the survey improved to -21.5, compared to -23.3 in the previous month. Meanwhile, the expectations index held steady at -3.8 in November.

Conducted between October 31 and November, the survey included responses from 1,066 investors.

In other developments on Monday, the S&P Global purchasing managers' index indicated that while the eurozone's manufacturing sector experienced a downturn in October, it did so at the slowest rate in five months.

Germany's investor confidence index rose by 1.7 points, reflecting some recent economic progress in the country.

"Although Germany's crisis situation cannot further alarm investors due to its already subdued tone, the data does not suggest a positive turnaround," the Sentix report noted. "Nevertheless, the reaction from investors indicates the potential impact of political shifts on economic sentiment."

The Sentix survey also highlighted continuing investor optimism about the U.S. presidential elections, marking the third consecutive rise in overall confidence.

However, the survey also reported a steep decline in the 'Inflation' theme barometer, dropping from +11 to -12.25 points, marking its lowest since July 2023.

"Given the current frail economy, there is indeed a need for an expansionary monetary policy," stated Sentix. "In the coming months, the central bank may face a clash of objectives, a situation that the financial markets may find particularly challenging to navigate."