Euro confidence drops again as investors sour
Investor confidence in the Eurozone has slumped to the lowest level in a year, despite the currency union’s modest return to growth.
The Sentix index of investor confidence fell to just 2.7 in August, down from 10.1 last month and barely in positive territory. The score has not been lower since August last year, when it reached minus 4.9.
In April the index reached 14.1, a three year high, but geopolitcal threats and concerns have brought the index swiftly down again. Any further dip could push figures later this year into negative territory.
Germany’s investors have seen a particularly steep drop. The forward-looking part of the index, which measures investors’ expectations, is now back into negative figures.
The sub-index reached over 20 just before the end of 2013, and has not been below zero for more than a year and a half.
The Eurozone’s producer price index (PPI) also reported yesterday, ticking up for the first time this year in June.
Factory gate prices rose by just 0.1 per cent between May and June, but a decline has been recorded in every other month in 2014 so far. Producer prices were still down 0.8 per cent year on year.
“The small rise in Eurozone producer prices in June was helped by energy prices rising 0.5 per cent month-on-month after falling through January-May,” said Howard Archer, chief European economist at IHS Global Insight.
“However, given that oil prices have fallen back appreciably after briefly hitting a nine-month high around $115 (£68.32) per barrel in mid-June, there will likely have been a renewed fall in energy prices in July,” he added.
Consumer price inflation dropped to just 0.4 per cent in July, the lowest in more than five years.