Investor confidence in the euro zone made a notable recovery in May, reversing much of April’s steep decline triggered by U.S. tariff tensions. The Sentix index surged to -8.1, up from -19.5 in April, outperforming forecasts of -12.5.
Current Conditions Show Unexpected Improvement
The current situation component of the index rose to -19.3, its best reading since August 2024. While still negative, the rebound signals improving sentiment despite lingering concerns.
Expectations Surge as Recession Fears Ease
Expectations among investors jumped by nearly 20 points to 3.8. Sentix noted that this shift suggests investors are moving away from recession fears expressed just a month earlier.
EU Response to Tariffs Earns Market Trust
Sentix attributed the morale boost to the European Commission’s measured approach to the Trump administration’s tariffs. German investor expectations also climbed more than 20 points to 5.5, underscoring the impact of a steady policy stance.
Tariff Fallout Hits U.S. and China Most
According to Sentix, the U.S., China, and Switzerland remain the primary economic casualties of the ongoing tariff measures. Despite improved sentiment, the survey cautioned that uncertainty remains.
