Key insights
- Euro zone investor morale improved slightly in May, driven by easing concerns over the Iran conflict. However, Germany's economic outlook worsened, falling to -30.9. Despite the Eurozone improvement, both current situation and expectation indices remain negative, signaling continued recession risk. The inflation barometer remains low.
BERLIN, May 4 (Reuters) - The Sentix index measuring investor morale in the euro zone improved slightly in May, indicating that investors do not expect a further escalation of the Iran conflict, but Germany bucked the trend with a further decline.
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The index rose to -16.4 points from -19.2 the month before, the survey showed on Monday, better than the forecast decline to -21.0, according to analysts polled by Reuters.
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The index for the German economy, Europe’s largest, bucked the trend, falling to -30.9 from -27.7 in April.
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Germany "finds itself not only in a government crisis but also in a distinct economic trajectory of its own," Sentix said.
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The survey of 984 investors taken from April 30 to May 2 showed improvement in both the euro zone’s economic expectations and the current situation in May.
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Expectations rose to -11.3 points from -15.5 the previous month, while the index measuring the current situation rose to -21.5 from April’s -22.8.
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"However, both indices remain in negative territory, meaning the risk of recession remains acute," Sentix said.
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The inflation barometer was only slightly above the annual low recorded last month at -42.75 in May.