Eurozone investor sentiment improves as leaders ramp up spending

(Sharecast News) - Investor sentiment in the eurozone improved this month, helped by European leaders stepping up investments into the region, according to results of a Sentix survey on Monday. The Sentix economic index for the single-currency region rose by 9.8 points to -2.9 in March, up from -12.7 in February.

Meanwhile, the eurozone expectations index rose for the third straight month, jumping 18 points to +17 - its highest mark since July 2021.

"The announcement of debt-financed armaments programmes (EU and Germany) and infrastructure investments (Germany) has investors positively euphoric about further economic development," the Sentix survey said.

Some €800bn has been earmarked for EU defence investments. Germany in particular has pledged €500bn, with a further €500bn for infrastructure, with the CDU's candidate for chancellor Friedrich Merz saying the party would do "whatever it takes" to get the economy back on track.

However, Sentix highlighted the impact of debt-financed spending has had on interest rates.

"Within a week, interest rates on German government bonds rose by almost half a percentage point to their current level of 2.84%," the survey said.