Investors' expectations sour in February as Trump takes office,Sentix says

Investor confidence around the world was rattled by the new US president's first actions in office, according to the results of the widely-followed Sentix survey.

The headline index for investors' economic confidence in the euro area slipped by 0.8 points month-on-month in February to reach a reading of 17.4, with a sub-index tracking their expectations retreating from 20.0 in January to 14.3 for February.

In parallel, another sub-index linked to how they judged the 'current situation' in the Eurozone improved from 16.5 to 20.5 - its highest value since May 2011.

"Investors’ expectations retreat for all world regions as the first acts of the new US President causes caution among the investment community," Sentix said, citing Donald Trump's "Twitter raid" and presidential decrees.

"The bullying US-President is a serious threat," Sentix added.

As regards expectations for the global economy, the expectations sub-index fell from 20.0 to 14.0, although the current situation gauge improved from 22.4 to 23.8 - its highest value since April 2011.

Expectations for the US economy also turned south among the 1,100 institutional and retail investors canvassed, with a sub-index falling from 26.5 to 17.6.

A sub-index measuring how they saw the current situation on the other hand held up much better, dipping from 46.5 to 45.0.

From among the other main geographical regions, a sub-index linked to expectations for Switzerland suffered the largest downturn, dropping from 18.0 to 7.8.

"Has investors’ expectations bubble on Trump now burst? Based on our sentix economic indicators, it is too early to draw a conclusion. Investors clearly perceive the latest action by President Trump counterproductive for growth. At the same time, investors thoroughly study the implementations of the first presidential actions. Resistance against the blunt way of President Trump to express his opinions and policies is already forming within the judicative. A glimmer of hope.

"[...] Therefore, we interpret the latest drop in our sentix economic expectation index as a warning for President Trump."