ECB QE Boost Investor’s Eurozone Sentiment

Sentiment in the euro zone surged to its highest level in 7-1/2 years in March as investors heartened by the European Central Bank’s bond-buying program brushed off concerns about the economic turmoil in Greece.

Sentix research group’s index tracking morale among investors and analysts in the euro zone climbed to 18.6, its highest level since August 2007, from 12.4 the previous month.

That was far higher than the Reuters consensus forecast for a reading of 15.0 and beat even the highest estimate for 17.5.

“The euro zone economy is showing definite signs of life,” said Manfed Huebner, managing director at Sentix, adding that low oil prices and the weak euro were helping euro zone countries to get back on their feet.

The ECB is due to start purchasing bonds on Monday in a bid to hoist euro zone inflation from below zero back toward its goal of just under 2 percent, and to boost economies in the 19-country bloc.

“Yields, which fell significantly in the run-up to this, are having just as positive an impact on the economy as very abundant liquidity for banks and the real economy,” Huebner said.

Investors were more optimistic about the future than at any time since February 2006 and they were the most upbeat about the current situation since May 2014.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza