Eurozone Investor Confidence Slumps On Weaker Expectations – Sentix

Euro area investor confidence decreased more than expected in March as expectations deteriorated sharply despite receding fears of a recession, survey results from the behavioral research institute Sentix showed Monday.

The Sentix economic index dropped to -11.1 from -8.0 in February. Economists had forecast a score of -6.3.

The current situation index of the survey rose to -9.3 from -10.0, marking the strongest reading since June 2022. The score improved for the fifth month in a row.

The expectations measure of the survey dropped to -13.0 from -6.0 in the previous month. The decline came after several months of improvement.

The March reading of the current situation index still means that the economy is currently in a stagnation phase at best, Sentix said.

“The usual early-year revival of the economy is in danger of being short-circuited,” the think tank added.

This stagnation phase could soon turn into renewed recession worries if the negative economic expectations materialize, Sentix said.

Weak money supply growth together with the rise in interest rates is likely to prove a serious burden on the economy in the further course of the year, the institute added.

The latest Sentix survey was conducted from March 2 to 4 among 1,309 investors.

The survey also found that investors were doubtful regarding the easing trend in inflation rates. The corresponding index dropped steeply to -32.25 from -14.25, signaling that “all hopes of an early end to the cycle of interest rate hikes are likely to be unfounded” for now.

The European Central Bank has already signaled another interest rate hike for this month and comments from policymakers suggest rates are likely to rise further in the coming months.

The overall index for Germany fell by almost 3 points to -9.6 points and the expectations measures dropped sharply to -11.8 points from -4.8 points. The current situation index improved for the fifth month in a row to -7.5, marking its strongest reading since June last year.

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