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US leads uptick in global investor confidence

The index of all regions increased, but the North American index saw the largest increase from 109.4 to 123.6. The European index rose from 90.2 to 95.3 and the Asian one recorded a slight increase, moving from 111.5 to 112.2. 

The results of the State Street Investor Confidence Index (ICI), released today measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors – the greater the percentage allocation to equities, the higher risk appetite or confidence. 

“We have seen a rebound in global sentiment in March after one of the worst starts on record,” said Jessica Donohue, executive vice president and chief innovation officer, State Street Global Exchange. “Oil prices have rallied and market volatility has subsided leading to a renewed enthusiasm for risk.”

Dovish Fed

“A dovish outcome from the Fed meeting earlier this month, in addition to the easing by the ECB, reversed half of the fall seen in the headline index since the middle of last year. It places us firmly back in the middle of an upward trending range in investor confidence that began in 2012, led most notably by North America,” said Timothy Graf, head of macro strategy Europe at State Street. 

Graf said it is unclear why Europe has a more subdued investor climate despite local policy action during the month, but believes instability on the political scene could be the culprit. “Europe’s other hot button issues, whether it is immigration policy, political fragmentation or the upcoming UK referendum on EU membership, are perhaps weighing on sentiment more strongly than the offsetting support of easier policy,” he said.

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