Investor confidence in the Eurozone´s outlook retreats to 2014 levels

Market participants grew more wary about the economic outlook for 2016 in February, as prospects for the US economy worsened and the German economy cooled, according to one of the most widely-followed barometres of investor sentiment.

Sentix´s economic sentiment index for the Eurozone retreated from a reading of +9.6 points for January to 6.0 in February - its lowest reading since April 2015.

A sub-index of investors´ expectations registered the largest drop, falling from 6.3 points in January to 1.5, the lowest mark since November 2014.

Nevertheless, the euro area was still deemed by investors to be the only one out of the ten regions monitored by Sentix that was still seeing an "upturn" while a sub-index for the global economy was pointing towards a slight downturn, Sentix said.

In parallel, the Sentix investor confidence index for the US fell from 9.6 points to 3.7, its worst reading since October 2012, while that for Latin America hit -45.3, its lowest level since December 2008, near the start of the Great Financial Crisis.

"The global economy is thus currently on the brink, led by a US economic downturn!" the institute said in a statement.

According to Sentix the majority of investors now considered the December 2915 interest rate hike by the US Federal Reserve to have been a mistake, even as the situation in commodity and emerging markets weighed on investors´ expectations.

The common denominator to those negative factors was the strong US dollar.

"Do we need a new "plaza accord" for a trend change?," Sentix concluded.