Sentix Investor Confidence fell by 3.6 points

Monday, Feb 08 2016

The euro zone proves, is it any wonder there, as not immune to the enormous loss of momentum in the global economy. The sentix economic sentiment indicator for the euro zone loses again 3.6 points and is thus at only +6 points. The current assessment index falls for the third time in a row to its lowest level since April 2015. The expectation index got hit even harder. With +1.5 points the index is at the lowest level since November 2014.

What is already apparent in the weekly sentix surveys, is now confirmed in the economic index too: The wordy protestations of central banks, to affect the economy with planned further rate actions (ECB) or with concrete implementation decisions (Bank of Japan) positively, currently fade among investors. Rather, two other factors currently dominate the scenery negatively. Firstly, the interest rate increase by the Fed in December 2015, which is now considered by the majority of investors a big mistake.

Secondly, the situation in commodity markets and Emerging Markets burdened prospects of the investors. The common denominator of these negative factors is the strong US dollar. Do we need a new "plaza accord" for a trend change? From the perspective of the investors interviewed by sentix, a continuation of the monetary and exchange rate policies of the past two years seems in any case not the appropriate measure to break the current, negative dynamics of the global economy.

Euro is currently being traded few points above 1.11 level. Pair is likely to find support around 1.1050 handle and resistance above 1.1150 level. There will be no major data releases in the rest of the session.

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