The economic outlook for Eurozone dimmed as Sentix Investor Confidence Index suffered its third consecutive monthly fall, reaching an eight-month low in July. The index tumbled from -17 to -22.5, significantly underperforming market expectations of -18.9. Both Current Situation Index and Expectations Index followed suit, dropping from -15.8 to -20.5 and from -18.3 to -24.5 respectively.
Sentix offered a stark assessment of the situation: “As of early July 2023, the Eurozone economy remains in recession mode.” The investment group expressed skepticism about the potential sources of an economic boost, observing the U.S. economy’s struggle to generate positive momentum, while downplaying any hope of central banks stepping in to counteract the economic downturn.
The investor sentiment towards the central banks’ policies was especially pessimistic, with the topic index “central bank policy” plummeting from -13 to -24, indicating that investors foresee an intensification of restrictive monetary measures.
Compounding this gloomy outlook, the corresponding Inflation Barometer slid from -6 to -14.5 points, with Sentix cautioning that the current situation is “clearly more serious than the usual summer lull”.
