Eurozone investor morale dips anew as global recovery prospects dim

The Sentix investor confidence gauge for the euro area ticked lower in November, dropping 0.3 points to 2.4, as economic expectations kept worsening. Market participants are growing more worried about whether the recovery can hold up given a range of challenges.

The sub-index tracking the current situation held steady at -3.3, while the expectations measure fell for a second straight month to 8.3, its weakest reading since June 2026. Even though the headline number remains marginally positive, the persistently negative assessment of present conditions indicates the eurozone economy is still mired in stagnation.

The sharpest decline in confidence was recorded in the United States, where the Sentix Economic Index slid 2.0 points to 13.1, also a low not seen since June 2026. The fall was fuelled largely by a drop in expectations, which lost 3.5 points to -2.5, moving into negative territory for the first time since June. By contrast, the current situation gauge stayed relatively robust at 30.0.

Sentix voiced concerns that a Democratic majority in both houses of Congress might complicate the Trump administration's economic programme and curb the room for further fiscal stimulus. Elevated financing costs and geopolitical risks are likewise adding to the rising uncertainty.

The weakening mood is not confined to the US and Europe. The Sentix Global Aggregate Index fell for a third consecutive month, reaching 12.7, its lowest point since June 2026. Economic expectations slipped for the third month in a row to 9.3, while the assessment of present conditions held fairly steady at 16.2.

On a brighter note, investors anticipate some stabilisation in the inflation outlook. The Sentix inflation theme barometer improved from -29.25 to -22.5, and the central bank policy barometer rose from -21 to -12.75, pointing to expectations of a somewhat less restrictive monetary policy stance, albeit alongside a worse growth outlook.

The Sentix survey signals a gradual erosion of global economic expectations against the backdrop of a Democratic Congress, the US-Iran conflict and central bank tightening. Although current economic conditions remain resilient, investors are increasingly uneasy about the outlook ahead.