- Johannes Mayr, head of economic research at BayernLB
The Euro zone investor sentiment index declined for a second month in a row to the lowest level since early 2015, as prospects for the US economy deteriorated and the German economy cooled. Sentix's economic sentiment index for the Euro zone dropped from +9.6 points for November to +6.0 in December, the lowest since April. At the same time, the expectations index plunged to 1.5, down from 6.3 a month earlier, the lowest level since November 2014. Investor confidence in Germany, the Euro zone's number one economy, hit its weakest point since November 2014, with the corresponding gauge falling to 14.5 in February from 18.1 a month earlier. The expectations index plunged to –2.6 in the current month down from 1.8 and the current situation index retreated from 35.6 in January to 33.
Meanwhile, the ECB's Executive Board member Benoit Coeure said another boost to QE programme is possible and policy makers are now discussing about which assets and what amount should be purchased ahead of the March meeting. The ECB's measures are working, but the central bank is ready to deploy more stimulus to get inflation to the targeted level. Coeure also added that the current period of ultra-low interest rates will last as long as needed, saying the ECB did not work under market pressure.
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