EZ heading for recession as morale slumps - Sentix survey

Investor sentiment in the eurozone has fallen to its lowest level in almost two years, according to a survey released on Monday, with inflation and the Ukraine war indicating the start of a recession in the second quarter of the 2022.

The Sentix index for the euro zone fell to -18.0 in April from -7.0 the previous month – the lowest level since July 2020.

“The Eurozone economy is thus being pushed into recession by the Ukraine conflict and accompanying sanctions and uncertainties,” Sentix said.

“For capital markets, this is likely to have considerable consequences in the coming weeks.”

A current conditions index fell to -5.5 from 7.8, its lowest level since April last year, while an expectations index fell to -29.8 from -20.8, its lowest level since December 2011.

“Due to the still considerable pace of inflation growth, investors do not expect the central bank to be able to come to the rescue with a looser, even more expansive monetary policy,” Sentix said.

“The economy and the stock markets are thus left to their own devices. For many investors, this is a new experience with its own risks.”

Sentix said morale was dropping globally although nowhere as sharply as in the euro zone.

"No region is able to resist the negative momentum at the moment, even the important Asian region is already fighting stagnation," it said.

Sentix surveyed 1,249 investors from March 31 to April 2.