sentix Market Profiles: Desperately looking for believers in the euro

Written by Sebastian Wanke | 08 July 2014
Posted in Special research

The new sentix Market Profiles which shed a light on investors' expectations for the second half of the year 2014 show that forex market participants can easily be wounded at the current juncture. Expectations for EUR-USD have become extremely tilt to the downside. This represents an upside risk for the common currency! For stocks investors have longer-term a positive bias but in the short run there is potential for surprises on the upside, too.

Global economic momentum helps the euro zone

Written by Sebastian Wanke | 06 July 2014
Posted in sentix Economic News

After having receded for two months in a row, the sentix economic index (composite index) for the euro zone increases again in July by 1.6 to now 10.1 points. On the one hand, investors assess the current economic situation as being better than last month. On the other hand, 6-month expectations also increase slightly after having weakened for four consecutive months. This stabilisation of expectations coincides with a European Central Bank taking new expansionary monetary measures. But a probably more important impact for the euro zone comes from the world economy as expectations improve even more strongly for the other regions in the survey. Posi-tive developments are especially pronounced for the US and for Japan. This should also have had a positive influence on investors' judgments concerning the euro area, too. Consequently, the euro zone now seems to bene-fit from a stronger world economy, while it was itself a prominent motor of global growth until just a few months ago.

sentix ASR Essentials 24-2014

Written by Patrick Hussy | 06 July 2014
Posted in sentix Weekly

Macro moves seen as less Bond-supportive

The latest Sentix survey underlines the ongoing improvement in sentiment towards equity markets (see Page 3), set against a less upbeat view on European bonds. While the past week has seen medium-term sentiment readings for Bunds tick a little higher, they remain well down from their May high-point, even as Bund prices have remained firm. This caution chimes with other readings that also indicate that survey participants view economic developments and inflation as having become less bond-supportive in the medium-term (Charts 2 and 3, page 2). Investors' caution on European Bonds may in part be reflecting changing opinion on the macro backdrop, and its implications for Bonds.

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EBI recedes despite fading economic optimism

Written by Sebastian Wanke | 30 June 2014
Posted in sentix Euro Break-up Index News

The sentix Euro Break-up Index (EBI) falls for a sixth straight month. In June, it decreases from 9.0% to 8.5%. Over the last two years investors have never been so optimistic regarding the euro's future. But at the same time investors' economic expectations have been weakening recently. And a slowdown in economic activity could well lead to renewed fears concerning a euro break-up. This possibility is obviously ruled out by investors at the current juncture.

sentix ASR Essentials 26-2014

Written by Manfred Hübner | 30 June 2014
Posted in sentix Weekly

Investors are polls apart on Equities compared to Bonds

The latest sentix survey points to a widening gap between investor opinion on equities and bonds. In the case of sentiment towards the near-term prospects for both assets, survey readings are running at relatively neutral levels. However, a gap is emerging in terms of medium-term expectations, which tend to not only be driven by price and emotions, but also by valuation. While survey respondents are becoming more upbeat about the six month outlook for global equity indices (see Charts 2 and 6), sentiment towards bonds is weakening (Chart 3). Even as Bund futures test two year highs, investor caution is growing towards their prospects in the medium-term.