FX.co ★ Eurozone Sentix Investor Confidence At 13-Month Low

Investor confidence in the eurozone saw a notable decline in December, largely due to the weaknesses in Germany's economy and ongoing political turmoil in France, according to the Sentix survey released on Monday. The Sentix investor confidence index for the eurozone dropped to -17.5 from November's -12.8, marking its lowest point since November 2023. This figure also fell significantly short of economists' expectations, who had projected a reading of -12.4.

Both the current economic conditions and future expectations weakened this month. The assessment of the present situation fell to its lowest since November 2022.

The current situation index plunged deeply into negative territory, reaching -28.5 from a three-month peak of -21.5 in November. Concurrently, the expectations index slipped to -5.8 from -3.8 previously.

The survey highlights an increasing risk of recession within the eurozone, with six-month outlooks offering little hope for improvement.

Investors are looking toward substantial intervention from the European Central Bank to stabilize the faltering economy. Nonetheless, persistent inflation remains a significant concern.

Sentix noted that the coming months might present a challenging scenario for the central bank, as they navigate conflicting objectives, which could pose difficulties for financial markets.

In Germany, the sentiment was particularly bleak in December, with no signs of optimism despite the call for new elections in the Bundestag. Germany's economic confidence index fell to -33.2, down from -29.8 in November.

The index tracking current conditions saw a sharp decline by 5.5 points, dropping to -50.8—its lowest since June 2020. The indicator of economic expectations also decreased to -13.5, slightly down from -12.8 the previous month.