Eurozone investor morale hits highest point in over a year
Eurozone investors started the new year in good spirits, a survey showed this morning, as morale grew for the third month in a row thanks in large part to positive developments in the US-China trade war.
Research group Sentix’s morale index rose to 7.6 points in January from 0.7 in December, taking it to its highest point in over a year.
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Sentix said that the most important factor in the increased optimism among Eurozone investors was “the gain in momentum in other regions of the world, especially in Asia”.
Feeding into this was “the slight easing of the trade dispute between the United States and China,” Sentix said.
The US and China – the world’s two largest economies – have been locked in a trade war for over a year that has seen both sides slap tariffs on hundreds of billions of dollars worth of the other’s goods.
Yet the two countries are set to sign a “phase one” trade deal in the middle of the month. It is likely to contain a pledge by China to buy more US agricultural product.
A Chinese delegation led by Vice Premier Liu He is planning to travel to Washington on 13 January to sign the deal, the South China Morning Post reported on Sunday. Washington and Beijing are yet to officially confirm the visit, however.
Sentix said that the boost to morale means “a recession in the Eurozone seems to be off the table for the time being”.
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The release of the survey came as data firm IHS Markit said that Germany’s services sector grew at the strongest pace in four months in November.
Germany – Europe’s biggest economy – suffered in 2019 under the weight of trade tensions and Brexit negotiations. Investors will be hoping that it can recover in 2020 and boost the Eurozone.