Eurozone Sentix Investor Confidence improved to -11.1 in September, up from -13.7 and beat expectation of -16.0. Expectations Index improved notably from -20.0 to -12.8. However, Current Situation Index declined for the fourth month in a row, from -7.3 to -9.5, hitting the lowest level since January 2015.
The Current Situation Index shows that “Eurozone is not far from a recession”, as noted by Sentix, as they expected a recession from -10 points. Sentix added: “It is also questionable whether a recession can be avoided. For even if the expected values have improved significantly to -12.8 points, they still bear a negative sign. A sustained turnaround would require positive expectations.”
Sentix also said, “Investors are focusing on two issues here: firstly, the trade dispute between the USA and China. After the bad experiences with US President Trump’s tweets, however, hardly anyone is prepared to make an advance payment here. What remains is the ECB, from which investors expect real wonders at the forthcoming meeting. The sentix barometer for central bank policy is +30 points. So, the expectations of Mario Draghi to deliver something big and effective are high. We’ll see if he can deliver. For the financial markets, but even more for the real economy.”
