Investor sentiment slides as Eurozone braces for Brexit
Investor sentiment has fallen in the eurozone, research published on Monday showed, as concerns about Brexit and the global economy weighed heavily.
The overall Sentix economic index came in at -3.7 in February, a sharp decline from January’s -1.5 and below analyst expectations, which ranged from around -0.6 to -1.3. The fall represented the sixth consecutive monthly decline and is the lowest reading since November 2014.
Overall values for the current and future situation fell 7.2 points to +10.8, the weakest since December 2016, said Sentix, a Frankfurt-based research firm.
The overall index for Germany, the powerhouse of the eurozone economy, fell to +3.1, its fourth straight decline and the lowest reading since August 2012.
Said Sentix: "A major reason for this development is likely to lie more and more in the approaching Brexit. The economy now has to deal with the contingency plans in view of the unresolved political situation. Many companies exposed to UK-EU trade are currently no aiming for growth; they would probably be satisfied with stable business in the coming months."
However, Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, was more upbeat.
He argued: "The main hit came from a sharp fall in the current situation index, while the expectations index increased slightly, to -17.3 from -19.3 in January. This divergence is usually a bullish signal in this survey, and the rebound in expectations also is consistent with the recovery in equity markets at the start of the year.
"Overall, the level of sentiment remains depressed, consistent with severe headwinds for risk assets. That said, we are cautiously optimistic that it will rebound further in coming months."