BERLIN (Reuters) – Investor morale in the euro zone rose for the eighth consecutive month in June, but economic recovery in the bloc is proceeding with difficulty, a survey showed on Monday.
Sentix’s index for the euro zone rose to 0.3 points for June from -3.6 in May. Analysts polled by Reuters had expected it to rise to -1.8 this month.
Importantly, the index on expectations saw a rise, increasing from 7.8 in May to 10.0 in June, “providing some encouragement that the trend may continue in the coming weeks”, Sentix said.
“Germany’s economy would have to send out a signal to generate more momentum. However, this signal has yet to materialize,” it said.
The barometer plunged into negative territory in the wake of Russia’s invasion of Ukraine last February.
The sluggish improvement since then “is certainly one of the main arguments for the ECB to be able to cut interest rates further”, Sentix said, adding that its inflation barometer also indicates an unfavourable inflation environment.
Germany’s economy, Europe’s largest, saw some improvement in June, with the index on the current situation rising to -26.3 from -33.5 in May.
“The stabilization of the German economy is only making moderate progress,” Sentix said.
The poll of 1,276 investors was conducted between June 6-8, Sentix said.
(Reporting by Friederike Heine; Editing by Rachel More)
