Eurozone confidence dampened by Brexit, Sentix reveals

Eurozone investor confidence has fallen to the lowest level since January after Britain voted to leave the European Union, a survey showed on Monday.

Sentix’s forward-looking headline index for measuring investor confidence in the eurozone fell to +1.7 points in July from +9.9 in June, missing analysts’ estimates of +5.0.

Brexit also dampened investors’ economic projections in July with the index on expectations plummeting to -2 points in July from June’s +10. It marks the lowest level since November 2014.

The index on investors’ view of the current economic situation also fell to +5.5 in July from +9.8 in June, the lowest since February 2015.

“Political risks sparked off the Brexit decision are a heavy burden for the already battered Eurozone,” Sentix said in its report. “The single currency zone has yet to prove its resilience to cope quickly with such a blow to the European project."

Chief eurozone economist at Pantheon Macroeconomics, Claus Vistesen, said he believes the European Central Bank's response to Brexit will be an extension of quantitative easing, which could "come as a disappointment to markets".

"This survey gives the first indication of the hit to sentiment from the Brexit fallout, and while further weakness next month is possible, the initial fall is smaller than we feared."