Global investor confidence rises in March
Investors across all regions are showing a renewed appetite for risk, according to the latest monthly State Street Investor Confidence Survey, with the Global ICI Index increasing by 8 basis points month on month to 114.6 as of March.
According to State Street, the growth in optimism was particularly pronounced in the US market, with the ICI increasing from 109.4 to 123.6 basis points month on month, while the European ICI increased from 90.2 to 95.3 basis points and the Asian index from 111.5 to 112.2 basis points compared to the previous month.
Timothy Graf, head of Macro Strategy Europe at State Street comments: “A dovish outcome from the Fed meeting earlier this month, in addition to the easing by the ECB, reversed half of the fall seen in the headline index since the middle of last year. It places us firmly back in the middle of an upward trending range in investor confidence that began in 2012, led most notably by North America.”
With regard to the European outlook, he adds: “The more modest improvement in Europe and lower level of confidence more generally is somewhat worrying, given we did get a significant local policy action during the month. European investor confidence peaked in late 2014, after the ECB introduced negative deposit rates and around the time a steady stream of hints at an asset purchase programme began to appear in policymaker commentary.”
While he highlights that the possible causes for European caution are impossible to pin down exactly, Graf notes: “Europe’s other hot button issues, whether it is immigration policy, political fragmentation or the upcoming UK referendum on EU membership, are perhaps weighing on sentiment more strongly than the offsetting support of easier policy.”