Talking Points:
- Sentix Investor Confidence Index at 15.1, above the expected 13.1
- Inflation expectations plunge from +16.5 to -11.5 points in November
- Euro little changed versus the US Dollar
The Euro was little changed (at the time this report was written) versus the US Dollar after today’s Sentix Investor confidence for November gained +3.4 points to reach +15.1, above the +13.1 reading expected by economists, and the October reading of +11.7. The Sentix Investor Confidence Index rates the six-month economic outlook for the Euro-Zone, surveyed from around 2,800 investors and analysts. A reading above zero indicates optimism, while a reading below zero indicates pessimism.
Looking into the report, Sentix said the reading marks a “significant sentiment swing regarding global economic expectations”. Sentix further remarked that the reason for rising economic expectations was growing confidence in Asian markets, presumably due to the Chinese administration restoring confidence in the potential of the Chinese economy. While the headline figure was positive, Sentix commented that institutional investor’s inflation expectations plunged from +16.5 to -11.5 points in November. Taking this into consideration, the report came in line with expectations for lower inflation in the Euro-Zone signaled by the European Commission forecasts last week, and continued rhetoric by the ECB.
Considering the fact that the ECB’s mandate is to keep inflation close, but below a target of 2%, and the fact that the Sentix index is usually not a market mover, the improvement in sentiment did little to induce further price action.
DailyFX Currency Strategist Christopher Vecchio recently said the Euro-Zone economic data have been on the upswing recently, and the ECB is more likely to introduce one extra policy measure in December; a deposit rate cut or an enhancement of the QE program, but not both.
