The most recent Expert Investor Europe sentiment data showed those German fund selectors who were positive on the macroeconomic outlook fall from 75% in September 2013 to just 54% in January 2014. Nevertheless, this remains higher than the historic averages for 2011 and 2012, which were 40% and 34% respectively.
This weakening sentiment has been shown by other recent indicators. For example, the Zew indicator of economic sentiment dropped 6 points to 55.7 in February. Economic data, however, continues to exceed expectations. German GDP growth for the fourth quarter was revised higher to 0.4% in early February, ahead of preliminary estimates of 0.25%.
Sentiment in France also remains poor with just 18% of fund selectors predicting an expansion in the macroeconomic outlook for the next 12 months.
In the rest of Europe, however, sentiment is buoyant and improving, particularly among the peripheral European countries. In Italy, 67% of fund selectors are positive about the macroeconomic outlook in January 2014, compared to just 47% in October. In Spain, 72% of investors are positive. This compares to an average of 32% for 2013 and a reading of 36% in June of last year.
