Euro area investor morale surprisingly picks up in May, indicating that investors do not expect a further escalation to the US-Iran conflict. There was one notable exception though, being Germany, with the index there falling further to -30.9 from -27.7 in April.

Of note, the expectations index also showed an improvement as it moves up from -15.5 in the previous month to -11.3 in May. Meanwhile, the current situation index is just up marginally from -22.8 in April to -21.5 in May. While showing some improvement, Sentix is quick to caution that “both indices remain in negative territory, meaning the risk of recession remains acute”.