Investor sentiment in the euro area rose for the first time in four months in October, signaling further attempts to pull the economy out of recession amid rising expectations on the back of ECB interest rate cuts and Chinese stimulus.
The Investor Confidence Index improved to -13.8 in October from -15.4 in September, results from behavioral research agency Centix showed on Monday. The expected score was -14.6.
Current valuations are again at the lowest of the year, while expectations are rising, Sentix said.
The current situation index was -23.3 in October, compared to -22.5 in September, falling for the fourth consecutive month and the lowest level since December 2023. In contrast, the expectations index rose to -3.8 from -8.0 last month.
“Investors are encouraged not only by the ECB's interest rate cuts, but also by the recent economic stimulus measures implemented in China,” Centix said.
The German economy is currently in recession mode. However, the recent growth momentum in China in particular has had an impact on expectations for the German economy, with expectations improving by 6.8 points. The Investor Sentiment Index in October was -31.5, up from -34.7 the previous month.
Nevertheless, the positive impact from China is still modest, and EU policy creates the next obstacle to growth: new car tariffs on electric vehicles from China.
