Eurozone investor confidence hits 13-month low as outlook worsens

(Sharecast News) - Investor confidence in the eurozone weakened to its lowest level in 13 months in December, according to Sentix, on the back of gloomy economic data from Germany and political turmoil in France. The Sentix overall economic index, which surveys thousands of institutional and retail investors each month, fell to -17.5, down from -12.8 in November, a level not seen since November 2023.

The current assessment index fell 7.0 points to -28.5, its lowest since November 2022, "meaning that a recession is increasingly becoming an issue for the eurozone", Sentix said.

Meanwhile, the expectations index - which tracks investor expectations for the next six months - dropped 2.0 points to -5.8.

"The weakness of the German economy continues to be a burden and now the government crisis in France is adding another major economic problem for the eurozone. The two largest countries in the eurozone are dragging down the EU economy," the survey said.

Sentix said that investor expectations around inflation worsened, which is "bad news for the ECB": "After all, the weak economy actually requires the support of an expansive monetary policy. The next few months could therefore reveal a conflict of objectives for the central bank, which could be particularly difficult for the financial markets to digest."