Euro area investor sentiment rose for a second straight month in December, raising expectations for an economic turnaround at the start of the next year, survey data from the behavioral research institute Sentix showed Monday.<\/p>\n
The Sentix investor confidence index climbed to -16.8 from -18.6 in November. Economists had forecast a reading of -15.0. The score was the highest since May this year.<\/p>\n
Both the expectations sub-index and the current situation measure improved in December.<\/p>\n
The expectations sub-index climbed to -9.8 from -10.0 and marked its highest level since February this year. Expectations improved strongly for the third month in a row.<\/p>\n
The current situation index rose to -23.5 from -26.8 in the previous month.<\/p>\n
“At 0.2 points, however, the increase [in the expectations index] is very moderate,” Sentix said.<\/p>\n
“However, as the situation values also improved slightly, the question arises as to whether we can speak of a trend reversal.”<\/p>\n
While many economists view three increases in the expectation value as a sign of a trend reversal, the still weak overall momentum and the lack of a certain amount of international support speak against this, the think tank said.<\/p>\n
“So far, there are no signs of a new upswing in any region,” Sentix said. “This would require positive expectations, preferably in double figures.”<\/p>\n
Such opportunities may arise at the start of the year as there are positive developments in the inflation outlook, the institute added.<\/p>\n
The inflation barometer of the Sentix survey improved for the fifth month in a row to 16.25 points.<\/p>\n
This suggest that investors not only see an end to the central banks’ prolonged cycle of interest rate hikes, but now also expect positive support from monetary policy, the institute said.<\/p>\n
Among the other main economies surveyed, the investor confidence in Germany also rose for a third month in a row, led by improved in the current situation measure. <\/p>\n