An indicator of euro-region investors sentiment rose to the highest in 20 months on speculation that the economic policies of US President-elect Donald Trump will bolster growth in the world’s largest economy, benefiting the 19 nations that share Europe’s single currency.
The Sentix investor confidence index jumped to 18.2 in January from 10.0 in December, lifted by the “Trump effect,” the Sentix research company said on its website on Monday. Trump pledged spending on infrastructure, lower taxes from certain groups of US taxpayers and less rigorous financial regulation. He will take office on Jan. 20.
Manfred Huebner, managing director of Sentix, said that anticipation of the economic impact of Trump’s policies only exacerbated a recovery, which had already been going on.
“The ‘Trump Effect’ on the global economy is not the trigger of the current economy recovery, it is just an accelerator within an ongoing process,” Huebner said. “The present economic recovery started with the turnaround of the emerging markets since February 2016. Even the surprising Brexit has been digested smoothly. The election of Donald Trump as next president of the United States has contributed to positive tailwinds.”