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Euro Zone Investor Confidence Slumps; Retail Sales Weaken More than Forecast

By:
James Hyerczyk
Published: Mar 6, 2023, 11:32 UTC

Euro Zone investor confidence slumped more than expected in March as expectations deteriorated sharply despite receding fears of a recession.

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Data released earlier today showed that the Euro Zone Sentix Investor Confidence Index worsened to -11.1 in March from -8.0 in February. In another economic release, Euro Zone retail sales figures for January came in below expectations.

The EUR/USD showed little reaction to the news, with most significant players on the sidelines ahead of Federal Reserve Chairman Jerome Powell’s two-day testimony, which begins on Tuesday.

Euro Zone Investor Confidence Drops on Weaker Expectations – Sentix

Euro Zone investor confidence slumped more than expected in March as expectations deteriorated sharply despite receding fears of a recession, survey results from the behavioral research institute Sentix showed Monday.

The Sentix economic index dropped to -11.1 from -8.0 in February. Economists had forecast a score of -6.3.

The current situation index of the survey rose to -9.3 from -10.0, marking the most vital reading since June 2022. The score improved for the fifth month in a row.

The expectations measure of the survey dropped to -13.0 from -6.0 in the previous month. The decline came after several months of improvement.

The March reading of the current situation index still means that the economy is currently in a stagnation phase at best, Sentix said.

“The usual early-year revival of the economy is in danger of being short-circuited,” the think tank added.

The stagnation phase could soon turn into renewed recession worries if the negative economic expectations materialize, Sentix said.

The institute added that weak money supply growth and the rise in interest rates would likely prove a severe burden on the economy in the year’s future.

The latest Sentix survey was conducted from March 2 to 4 among 1,309 investors.

The survey also found that investors needed to be more particular about the inflation rate easing trend. The corresponding index dropped steeply to -32.25 from -14.25, signaling that “all hopes of an early end to the cycle of interest rate hikes are likely to be unfounded” for now.

Euro Zone Retail Sales Weaker than Expected in January

Euro Zone retail sales rebounded much less than expected month-on-month in January and were still lower than 12 months earlier, underlining the weakness of consumer demand in the Euro Zone and the broader economic slowdown, data showed on Monday.

The European Union’s statistics office Eurostat said retail sales in the 20 countries sharing the Euro rose 0.3% month-on-month in January for a 2.3% year-on-year decline.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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