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Sentix Signaling Resilient Economic Expectations in The Euro-Zone

Sentix Signaling Resilient Economic Expectations in The Euro-Zone

Oded Shimoni, Junior Currency Analyst

Talking Points:

- Sentix Investor Confidence Index rose to +6.2 from the prior +5.7, above expectations

- Report says economic expectations remain unchanged in May

- Sentix say expectations for Japan and the US weakened

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Sentix Investor confidence Index gained +0.5 points in May to reach +6.2. The index rose above the April reading of +5.7, and was above economists’ expectations for a rise to +6.0. The survey showed that the “Expectations” value remained unchanged at +5.5 points. The “Current Situation” value rose by 1.0 points to +7.0, from the prior +6.0, which led to the overall rise in the index.

The Sentix Investor Confidence Index rates the six-month economic outlook for the Euro-Zone, surveyed from registered investors and analysts. A reading above zero indicates optimism, while a reading below zero indicates pessimism.

Looking into the report, Sentix said that while economic expectations for the Euro-Zone remain nearly unchanged, expectations for Japan and the US weakened. Despite that, the emerging markets continued to recover, but the improvement did not prevent the global headline index from falling by 0.9 points.

DailyFX Currency Strategist Christopher Vecchio recently said that implicitly, expectations for future rates in the Euro-Zone have become less dovish, which may be supporting the Euro.

Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing a reading of about -1.62 at the time of writing, meaning that for every trader long the EUR/USD, there are 1.62 on the short side. The SSI is a contrarian indicator, implying EUR/USD strength.

You can find more info about the DailyFX SSI indicator here.

EUR/USD 5-Minute Chart: May 9, 2016

--- Written by Oded Shimoni, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.