Investor Confidence in The Eurozone Decreased

Today’s survey reported that investor sentiment in the eurozone fell unexpectedly in February, as the economy was affected by the lockdown measures aimed at curbing the pace of Covid-19 cases, unlike other regions in the world that achieved further recovery.

Sentex Euro-zone index fell below zero, dropping from 1.3 in January to minus 0.2. A Reuters poll had forecast a reading of 1.9.

Sentix said, “the EU order debacle and the resulting slower pace of vaccination are weighing on the mind and exposing the bureaucratic deficits in Euroland. As a result, the EU economy is losing touch with the other regions of the world, which are continuing their recovery course in the month of February.”

It also warned, “a permanent prolongation of the lockdown could become a problem because the difference between expectation and the current situation (the so-called expectation gap) is extremely high! There is a potential for a temporary disillusionment here. Fatal would be in any case a repeated demolition of the expectation component. The consequence would be a renewed recession.”

The index of expectations fell to 31.5 from a high of 33.5 recorded in January, while the current conditions index reached negative 27.5, down from minus 26.5 in January.