- Eurozone October Sentix investor confidence 2.7 vs 5.0 expected
- Prior 5.1
The mood among euro area investors has taken a step back in October, with the details being slightly more telling than the headline drop itself.
The Sentix investor confidence index fell to 2.7 in October from 5.1 in the month before, missing expectations and pulling back from the more than four-year high in September.
That being said, investors aren’t necessarily saying that conditions have suddenly deteriorated. The current situation index was unchanged at -3.3. Instead, it was expectations that took the hit – falling by 5 points to 8.8.
The readings here offer a more interesting mix to markets alongside the stronger Eurozone PMI figures released earlier today. It is a suggestion that there is a bit of a disconnect starting to emerge.
There is a sense that the hard part of the recovery story is looking better, but investors are becoming less confident about where things go next from here.
The risks to the inflation outlook is one of the more obvious headwinds, with euro area inflation jumping bac to 3.8% in September. But there is also borrowing costs staying elevated and fiscal concerns in France are adding another layer of uncertainty.
For now, I wouldn’t say that the Sentix survey deterioration is a signal that the recovery is falling apart. However, it does suggest that after several months of improving sentiment, investors are starting to question just how smooth that recovery will actually be.
This article was written by Justin Low at investinglive.com.