A quiet farewell

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The term of office of ECB President Mario Draghi was dominated by the struggle for the stability of the euro area. While the ECB was still confronted with serious doubts about stability in 2012, the situation has changed significantly to this day. The sentix Euro Break-up Index is close to its all-time low.

This week ECB President Mario Draghi hands over the baton to his successor Christine Lagarde. The Frenchwoman, former head of the International Monetary Fund (IMF), is confronted with many monetary policy challenges and questions. At one point, however, the house seems to be in good shape: investors are currently not questioning the euro. With a value of 6.38%, the sentix Euro Break-up Index is trading just above its all-time low. Mario Draghi kept his word: he did everything he could to keep the euro together - and it was enough. Both investor groups surveyed by sentix share this finding, although the residual scepticism among private investors is even more pronounced than among the professionals, for whom an end to the Euro uncertainty was already marked in 2017.

sentix Euro Break-up Index: Overall Individual Investor Index and Overall Institutional Index

sentix Euro Break-up Index: Overall Individual Investor Index and Overall Institutional Index

Now follows Madame Lagarde, a new president who will not only develop her own language, but who, as a politician, will also be viewed with a certain suspicion by investors from a monetary point of view. But since she was able to ex-perience the Greek tragedy at close quarters, she can be trusted to act no less decisively when it comes to the euro than her predecessor. Investors are giving her that trust.

Background

The sentix Euro Breakup Index is published on a monthly basis and was launched in June 2012. Its poll is running for two days around the fourth Friday of each month. Results are regularly published on the following Tuesday morning. Survey participants may choose up to three euro-zone member states of which they think they will quit the currency union within the next twelve months. Further details on the sentix Euro Breakup Index can be found on https://ebi.sentix.de

This month’s reading of 6.38% means that currently, this percentage of all surveyed investors expect the euro to break up within the next twelve months. The EBI has reached its high at 73% in July 2012 and touched its low at 6.32% in April, 2018.

The current poll in which about 1.000 institutional and retail investors participated was conducted from September 26th to September 28th, 2019.

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