Eurozone investor sentiment improves - Sentix

Investor sentiment in the eurozone improved more than expected in January, according to data released on Monday.

The Sentix investor sentiment index for the bloc rose to -17.5 from -21.0 in December. This marked the highest level since June 2022 and was a touch above consensus expectations for a reading of -18.0.

The expectations index improved to -15.8 in January from -22.0 the month before, while the current conditions gauge printed at -19.3 versus -20.0.

Sentix said: "Investors are still assuming a recession, but it is expected to be much milder. The sharp economic downturn, which was expected by the majority of investors by October 2022, is therefore off the table.

"However, it should not be overlooked that the improvement is still at a low level. Both subcomponents for Euroland are still clearly in negative territory. Investors continue to assess the current situation as recessionary. Based on this diagnosis, the expected values are to be read.

"On a six-month horizon, a deterioration - albeit less pronounced - is feared. The surprisingly high gas levels, the milder winter weather and the continued stability of the labour markets are contributing to a moderation of the original recessionary path. Overall, the economic environment remains challenging. The latest increases should not be misinterpreted as a general turnaround. The risks of recession remain."