Figures from the Sentix showed that the eurozone investor sentiment fell sharply in December, ending a two-month increase and reaching its lowest level since November 2023, with both the situation and expectations values declining. The poll of 1,148 investors was conducted from December 5th to December 7th.
The investor confidence index fell to -17.5 points from -12.8 points in November, while consensus estimates suggested growth to -12.4 points. The economic expectations index fell by 2 points to -5.8 points. Meanwhile, the current situation index fell to -28.5 points (the lowest value since November 2022) from -21.5 points in November.
Sentix said that 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. "Investors are expecting strong support from the ECB to help the faltering economy. However, the threat of inflation continues to be perceived as a burden. The thematic barometer ‘Inflation’ turned significantly downwards in November and, at -12 points, indicates almost the same level of pressure as in the previous month. This is bad news for the ECB and therefore also for investors' interest rate hopes. After all, the weak economy actually requires the support of an expansive monetary policy", - Sentix added.
Meanwhile, the investor confidence index in Germany fell to -33.2 points from -29.8 points in November. The economic expectations index fell to -13.5 points from -12.8 points in November, while the current situation index fell to -50.8 points (the lowest value since June 2020) from -47.8 points.