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Euro zone Sentix index shows surprise rise in July

Published 07/07/2014, 09:45
Euro zone Sentix index shows surprise rise in July

BERLIN (Reuters) - Sentiment in the euro zone showed a surprise improvement in July with investor optimism boosted by the European Central Bank's growth measures and improved expectations for the global economy, according to the Sentix index survey.

The Sentix research group's index tracking morale among investors in the euro zone hit 10.1 in July versus 8.5 the previous month, rising after two consecutive monthly falls.

The consensus forecast in a Reuters poll had been for the sentiment index to fall again in July to 8.0 but the increase came in above even the highest forecasts.

A sub-index of expectations for the currency zone's economy in the next half-year picked up for the first time in four months though it was still relatively weak. It rose to 18.3 from 17.0 in June, which was the weakest reading since August 2013.

The sub-index on the current economic situation in the euro zone rose to 2.3 from 0.3 last month.

"After a four-month weakening phase, growth expectations for the euro zone are now stabilising," Sentix said.

The index was based on a survey of investors conducted between July 3 and July 5, which Sentix said gave them a month to digest the potential impact of the ECB's decision to cut rates to record lows and boost bank lending.

© Reuters. Construction workers are pictured on a large construction site in downtown Frankfurt

"This stabilisation coincides with the new monetary policy measures of the European Central Bank. But the real boost for the euro zone comes from the world economy," Sentix said, singling out improvements in the United States and Japan.

The Sentix global index hit its highest level since January at 17.9, an index tracking Germany rose to 29.0 in July from 28.8 in June, the United States reached its highest level since February 2004 at 29.3 and an index for Japan rose to 9.6.

(Reporting by Stephen Brown, Editing by Alexandra Hudson)

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