The Market Mood In Europe Has Taken A Gloomy Turn
Folks are feeling a bit gloomier across Europe, even as interest rates fall and inflation remains mostly on target, according to the ZEW eurozone investor survey, released Tuesday.
The closely watched survey nearly echoed the findings released last week by research institute Sentix, which showed sentiment falling for a third straight month, to a low not seen since January. And it suggests rising worries about an economic slowdown.
The drop in optimism is most severe in Germany, both across current conditions and expectations. That makes sense: the region’s biggest economy is at risk of falling into a full-blown recession. And there have been signs of slowing in the overall region’s economy recently, as well.
Now, economists at abrdn believe the eurozone’s slowdown will prove temporary. The European Central Bank has already cut interest rates twice and the effects of lower borrowing costs are likely to boost the overall economy. But for Germany, a recession is still a very real risk.
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