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Sentix eurozone economic expectations index at lowest level in nearly 6 years

Economic sentiment in the eurozone fell for the fifth straight month in June, with economic expectations in the single-currency area declining to their lowest level in almost six years amid rising investor concerns over the new Italian government and U.S. tariffs on steel and aluminum, according to Frankfurt-based independent research institute sentix.

"The new government in Italy is giving investors fears for the eurozone. For no other region in the sentix survey, economic expectations are falling more sharply," said Manfred Hübner, managing director at sentix.

Sentix's overall economic index decreased to 9.3 in June from 19.2 in May. The expectations index dropped to its lowest level since August 2012, falling to negative 13.3 from negative 2.0. The current situation index dropped for the fourth straight month, to 34.5 from 42.8 in May.

The overall index for Germany declined for the fifth consecutive month, dropping to 18.5 in June from 23.5 in May as investors consider Germany to be particularly vulnerable to an escalation of trade tensions. The expectations index fell to negative 13.8 from negative 7.8 and the current situation index decreased to 56.3 from 59.8.

"Internationally, the U.S. economy is proving relatively robust, although the negative expectations of investors here also signal that the USA should not overstretch the curve," Hübner said. For the U.S., the overall index fell slightly to 20.3 in June from 22.1 in the prior month and the current situation and expectations indexes also deteriorated slightly.

The research institute's overall economic index for Asia excluding Japan fell to 20.6 in June from 22.7 in May but it remained the only region with positive economic expectations. Japan fell to 14.3 from 17.3.

Sentix's overall economic index for the global economy declined to 15.0, its lowest level since November 2016, from 19.4.