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Eurozone Investor Sentiment Continues to Rise amid Ukraine Crisis: Sentix

H.S. Borji
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Eurozone Investor Sentiment Continues to Rise amid Ukraine Crisis: Sentix

Investor confidence in the Eurozone continued to rise this month, a sign investors remained optimistic amid escalating tensions in the Ukraine’s Crimea region.

Sentix’s gauge of institutional investor sentiment increased from 13.3 to 13.9, the highest level since April 2011. A reading above zero indicates optimism, whereas a reading below that level denotes pessimism.

Investors’ assessment of the current situation continued to drive optimism this month, Sentix data showed. The current situation index rose 3 points to 4.8, the highest level since July 2011. Expectations, however, fell for the first time since September 2013, with the six-month forward-looking indicator declining from 25.5 to 23.5. In Germany, expectations fell for a third time in a row.

Eurozone investors’ improved outlook is likely a reflection of broadening recovery in the currency region, which now appears to be spreading from the core to the periphery. In the rest of the world, however, the outlook is much more varied.

“Against the background of the Crimean crisis the sentix economic index for Eastern Europe drops strongly,” wrote Sentix senior analyst Dr. Sebastian Wanke. “But it rises for the two other emerging-markets regions, Asia [excluding] Japan and Latin America. For the US, investors’ opinions remain almost unchanged, while for Japan sentiment worsens further.”

In currency news, the euro strengthened moderately, inching closer to the 1.39 US level. The EURUSD pair spiked last week after the European Central Bank opted to make no changes to the interest rate. Accompanying the decision were dramatic comments by ECB President Mario Draghi, who called the Eurozone an “island of stability.” As of 15:15 GMT, the EURUSD pair was holding on to gains at 1.3882.

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