Never mind the politics: Investor confidence in the Eurozone hits a 10-year high

Lucy White
Investors' confidence in the Eurozone was better than expected (Source: Getty)

What with Angela Merkel's less than convincing win in the German election last month, and upheaval caused by rows between Spain and Catalonia, investors have had good cause to raise an eyebrow at the Eurozone over the last month.

But instead, investor confidence in the region has hit a 10-year high according to the latest Sentix index.

The improvement of 1.5 points, to 29.7, beat economists' expectations of a fall to 28 points.

Read more: UK investor confidence bounces back up after General Election uncertainty dip

“The first mood test for the economy after the elections in Germany and the independence efforts in Catalonia has been successful,” said a Sentix analyst.

“Regardless of all the political currents in the Eurozone, investors see not only the core zone of Euroland in a better way [regarding] economic growth but also increasingly the troubled countries of the south.”

The survey, which involves 992 investors, found that respondents were more positive about both the current situation and the next six months. The current situation results rose by two points to 41.8, while the expectation numbers rose by one point to 18.3.

Read more: What Brexit? UK investors are feeling more confident in their investments than European peers

“This should increase pressure on the European Central Bank to drive a more restrictive course in monetary policy,” said the Sentix analyst.

Although a coalition government in Germany has not yet been formally agreed upon, the country saw huge leaps in investor confidence. Current situation numbers jumped from 63 to 65.3 while expectations were boosted from 8.3 points to 13.

Despite this pat on the back for the Eurozone, the currency moved little against sterling or the dollar during the morning. The euro was hovering around $1.174 and £0.893 at 11.30am.

Read more: Confidence in Eurozone economy takes a dive as investors await European Central Bank (ECB) stimulus signals

Related articles