Investor confidence in the Eurozone took a sharp hit in August, with Sentix Investor Confidence Index plunging from 4.5 to -3.7, well below expectations of 6.2. Current Situation Index dropped further into negative territory, falling from -7.3 to -13.0. Expectations Index fell steeply from 17.0 to 6.0. Germany’s figures were even more troubling: the overall index dropped from -0.4 to -12.8, with the Current Situation down from -18.8 to -29.0 and Expectations collapsing from 19.8 to 5.0.
According to Sentix, the sentiment collapse reflects investors’ early judgment of the EU-US tariff deal — and the assessment is “devastating.” The agreement, instead of offering clarity or relief, has triggered renewed concerns about Eurozone export sectors. Recent optimism about Germany’s recovery is now in doubt, with export-oriented industries seen facing more pressure in the months ahead. Investors are also increasingly anxious about rising government debt across the bloc.
Adding to the gloom, inflation shows no signs of easing. Sentix’s inflation theme index fell to -11.75, reinforcing the view that the ECB has limited room to ease policy further. With sentiment deteriorating, debt concerns mounting, and no clear inflation relief in sight, the Eurozone’s path to recovery looks increasingly fragile.
