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Sentix: German politics knocks eurozone economic sentiment in February

Economic confidence in the eurozone eased in February as investors' expectations fall to the lowest level in a year, due to concern over negotiations for a German grand coalition, said Frankfurt-based independent research institute Sentix in its monthly report.

Sentix's overall index for the eurozone dropped to 31.9 from 32.9 in January. The current situation indicator stood at 49.5, its highest level since August 2017. Business expectations dropped to 15.5 from 18.8 in the previous month.

"The recovery process in the eurozone is thus continuing, although the first clouds are appearing in the blue economic sky," Sentix said in its report.

The decline in expectations was particularly marked in Germany, where it fell by six points to 5.5, the lowest since July 2016. Angela Merkel's Christian Democrats are in talks with the Social Democratic Party to hammer out compromises on healthcare and labor policy.

Germany's current situation index fell to 71.5 from 72.3 in January. The overall index slipped to 36.2 from 40.1.