Euro zone economic sentiment was better than expected in May, rebounding after 10 consecutive monthly falls thanks to more optimism in the biggest sector, services, but also in industry and among consumers, European Commission data showed on Tuesday.
The Commission’s economic sentiment indicator for the 19 countries sharing the euro rose to 105.1 in May from 103.9 in April, beating market expectations of no change.
Services sentiment improved to 12.2 from 11.8, beating expectations of a decline to 11.0 and the mood in industry defied expectations of no change to rise to -2.9 from -4.3. The index for consumers rose to the expected -6.5 from -7.3.
But separately, the Commission’s business climate indicator, which helps point to the phase of the business cycle, continued to fall, declining to 0.30 in May from 0.42 in April, well below market expectations of a decline to 0.40.
DAX reacted negatively on this news with the correlation of S&P 500. The market is now moving by the bottom (support) trendline and if we saw a breakdown, there would be a big probability of bigger price drop.
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