Eurozone Sentix Investor Confidence Deteriorates On German Chaos

(RTTNews) - Euro area investor sentiment weakened further in September as the single currency bloc remains on the brink of recession with the political and economic chaos in Germany weighing heavily on the entire region.

The investor confidence index fell to -15.4 in September from -13.9 in August, survey results from the behavioral research institute Sentix showed Monday. This was the third consecutive fall and reached the lowest since January 2024.

Sentix said "The eurozone is struggling with dangerous recessionary tendencies 'thanks to Germany'."

Although the current situation is deteriorating, there is hope that the expectations value improved slightly. Investors are not expecting any global contagion from the German economic problems, Sentix said.

The current situation index posted -22.5 in September, the lowest since December 2023, and down from -19.0 in August. By contrast, the expectations index rose to -8.0 from -8.8 in the prior month.

In Germany, investor confidence weakened further to the weakest since October 2022. The investor sentiment index hit -34.7 in September, down from -31.1 in the previous month.

The German economy is in free fall, said Sentix. "With the upcoming Brandenburg elections, however, the chaotic days of the traffic light government should be coming to an overdue end," Sentix said.

"After that, we will see how much lasting damage the economic odyssey of recent years has actually caused," Sentix added.

The current situation index slid to -48.0 from -42.8 in the prior month. The expectations index fell more sharply to -20.3 from -18.5 in August.

The prospect of a loose monetary policy is the only hope for investors. The no-tenbank theme barometer climbed to 33.25 points, reaching levels seen during the coronavirus crisis. Investors forecast further rate cut this month.

At 14.25 points, the 'Inflation' theme barometer was almost as high as it was at the beginning of the year. Investors also anticipate governments to continue their expansionary behavior and increase their debt levels.