Morale among investors in the euro zone jumped for the second month in a row amid buoyant Asian economies and growing expectations of fiscal intervention by governments nearer home, a survey showed.
The Sentix research group's index of investor morale climbed to 0.7 points, up from -4.5 last month and its highest since May. Expectations reached their highest since March 2018. For Germany's export-driven economy, they were at their highest since February 2018.
The survey of 1,000 institutional and 4,000 private investors found that a growing number now expected the euro area to dodge a recession that many had been expecting, with more European Central Bank policymakers and the new European Commission all seen as favoring more government spending.
"More and more investors are convinced that the worst is over for the economy in the euro zone and that impulses from the central bank and politicians will stimulate the economy in the coming months," Sentix managing director Patrick Hussy wrote.
Investor optimism was best reflected in labor markets, which had remained "extremely robust" despite economic weakness in Europe and the United States over the past two years. That would soon feed through into wage inflation, Sentix said.
Germany, Europe's largest economy and an export powerhouse, has been hit by trade conflicts between China and the United States, but Sentix's survey showed investors were optimistic for its future because of strong Asian growth.
"The region Asia ex-Japan is developing into a bearer of hope in the global context," Hussy said. "The economic region around China is in the upswing quadrant on the economic clock."