Figures from the Sentix showed that the eurozone investor sentiment rose strongly in May, exceeding economists' forecasts and rebounding from its lowest level since October 2023, as investors have largely abandoned the recession fears they expressed last month. Overall, both the current situation and expectations are showing signs of recovery. The poll of 1,067 investors was conducted from May 1 to May 3.
The investor confidence index rose to -8.1 points from -19.5 points in April. Economists had expected growth to be -14.9 points. The economic expectations index jumped to 3.8 points from -15.8 points in April. Meanwhile, the current situation index rose to -19.3 points (the highest value since August 2024) from -23.3 points in April.
Sentix said that the theme barometers provide further insight into investors' current expectations for the economy. "Inflation data came as a surprise with a significant improvement. At least for the eurozone, no negative inflation surprises are expected. From the perspective of ECB investors, this should enable further interest rate cuts, which are likely to be the basis for improved economic expectations. All in all, investors now have a more subdued but basically ‘calm’ view of the economy than they did in March", Sentix added.
Meanwhile, the investor confidence index in Germany rose to -16.0 points from -27.8 points in April. The economic expectations index improved to 5.5 points from -15.8 points in April, while the current situation index increased to -35.3 points (the highest value since July 2024) from -39.0 points in April.