Germany without Jamaica, Europe without stress

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The last few weeks, which in Germany have been marked by a tough and ultimately unsuccessful struggle for a new government in the form of a Jamaican alliance, have made no difference to the Euro zone from the investors' point of view. The sentix Euro Break-up Index fell slightly to 7.9% in November and is still trading near its all-time low. This means that investors do not worry about Germany's stability and in fact assume that the "grand coalition" will continue, either explicitly or implicitly through a minority government.

It remains to be seen, however, whether this calmness will also bear fruit in the event of more difficult developments in the euro zone. At the moment, it is probably above all the excellent state of the economy that makes the euro zone so resistant to bad news.

sentix Euro Break-up Index: Headline Index Euro area

sentix Euro Break-up Index: Headline Index Euro area

However, doubts about the continued existence of the euro zone do not want to give way. The two problem children are still called Greece and Italy. Investors are not impressed by the Greeks' manoeuvring to restructure their out-standing bonds and thus increase market liquidity and acceptance. Contrary to the general trend, the assessment of Italy has even slightly deteriorated from 4.2% to 5.0%. Investors are anxiously awaiting the upcoming Italian parliamentary elections.

sentix Euro Break-up Index: Sub-index Greece and Italy

sentix Euro Break-up Index: Sub-index Greece and Italy

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 http://ebr.sentix.de.

This month’s reading of 7.9% 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 7.61% in July 2014.

The current poll in which about 1.000 institutional and retail investors participated was conducted from November 23rd to November 25th, 2017.

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