Investor sentiment in the Eurozone turned notably upbeat in June, as Sentix Investor Confidence index climbed from -8.1 to +0.2—its first positive reading since June 2024 and well above expectations of -6. Current Situation Index also improved markedly from -19.3 to -13.0, while Expectations Index jumped from 3.8 to 14.3.
Germany led the improvement, with its overall Sentix index rising to -5.9, the highest since March 2022. Expectations climbed by 12 points to 17.5, while current conditions advanced for the fourth consecutive month to -26.8.
According to Sentix, fears of a recession triggered by the US tariff shock in April have largely dissipated, and the economic outlook for the Eurozone is now tilted toward a cyclical upswing.
With economic momentum building and the Sentix inflation barometer showing signs of easing price pressures, ECB may view its policy as being in a “comfort zone.” While another rate cut isn’t off the table, any such move could be delayed if the upswing continues to solidify over the summer.
