German economy loses steam

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The sentix economic index (composite index) for Germany falls in April for the third time in a row. While 6-month-expectations have been dragging down the indicator over the past months, it is now also the assessment of the current situation which is not lending support to the composite index anymore. The German economy thus loses steam. The big question now is how the euro-zone economy will react to this. Still, it is looking robust: The composite index for the euro area increases, once more, slightly. But expectations are down a little for the sec-ond consecutive month. For the rest of the world sentiment is improving slightly in April. Investors are again more upbeat for the emerg-ing-markets regions after last month's Crimean crisis shock. Also do they see improvements for the US. But sor-rows are growing for Japan: Here, the composite index falls markedly for the third time in a row. 6-month-expectations for Japan's economy have now reached a level last seen in November 2012. That was exactly the time when the so-called "Abenomics" started to take effects on investors' confidence. Their positive impact has obviously faded now.

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Investors do not see Portugal leaving the euro anymore

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The sentix Euro Break-up Index (EBI) decreases once more to a new all-time low of 10.9% in March after 11.7% in the previous month. This reading shows that currently only one in nine investors expects at least one country to leave the euro area within the next twelve months.

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Utilities – investors are getting cold feet again

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sentix Sector Sentiment for European utilities stocks experiences a significant setback in March. It is now the worst among all 19 Stoxx segments. The deterioration is rather remarkable as absolute and relative performances of utilities stocks have been rising over the past weeks. For contrarian investors this is a clear opportunity.

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Sentiment for emerging-markets stocks close to all-time low

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In March, sentix Emerging Markets Equity Sentiment falls markedly and now stands closely to its all-time low recorded just after the collapse of Lehman Brothers, an investment bank, in 2008. Contrarian investors may see this as an investment opportunity. But we remain cautious so far. Firstly, the indicator has a significant lead on the actual developments of emerging-markets stocks which means that there is no need to hurry at the current juncture. And secondly, investors might become even more pessimistic in the weeks ahead.

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Robust, but heterogeneous

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The sentix economic index (composite index) for the euro zone rises again in March and climbs from 13.3 to 13.9 points. This development is driven by investors' assessments of the current situation, while 6-month expecta-tions fall for the first time since September. For Germany, expectations decline for the third month in a row. Nevertheless, the composite index still signals that the German economy is in the middle of boom.

In the rest of the world things look rather mixed: Against the background of the Crimean crisis the sentix eco-nomic index for Eastern Europe drops strongly. But it rises for the two other emerging-markets regions, Asia ex Japan and Latin America. For the US, investors' opinions remain almost unchanged, while for Japan sentiment worsens further. The composite index for the global aggregate stays at a constant level, but the relatively high heterogeneity between countries and regions points to an increased uncertainty among investors and blurs the overall picture. 

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