Eurozone sentiment at 11-month high, but German confidence falls again

4th Mar 2024 10:08

(Sharecast News) - Investor confidence in the eurozone has risen to its highest level in nearly year, according to data released on Monday by Sentix, though weakness in Germany continues to weigh heavily on optimism across the region.

The Sentix eurozone sentiment index for March rose to -10.5, its fifth consecutive increase and up from -12.9 in February and -15.8 in January. This was the highest reading since April 2023.

"To speak of a spring revival would probably be an exaggeration. However, the Sentix economic index for the eurozone has improved for the fifth time in a row, although it remains negative at -10.5 points," Sentix said in a statement.

The current situation assessment measure increase 1.5 points over the month but remains firmly in negative territory at -18.5, though the starkest improvement came from the expectations index which rose 3.2 points to -2.3 - its highest since February 2022.

Commenting on the data, economist Morgan Ansell from Oxford Economics said recent datapoints have indicated that "the worst is behind the eurozone for now", pointing to quarter-on-quarter economic growth across the region of 0.2% in the first three months of 2024.

"However, the same cannot be said for Germany which is now single handedly becoming the main downside risk for eurozone growth," Ansell said.

The headline reading of investor sentiment in Germany fell by a further 0.8 points to -27.9 in March, with the expectations index falling 0.3 points to -14.3 and the current situation measure dropping 1.2 points to -40.5 - the lowest score since July 2020.