The Eurozone economy has been weakening considerably during the last two years in the Eurozone, due to the trade war, but also partly because of the central banks hiking interest rates, when the global economy got used to being on life support. As a result, the consumer confidence turned negative, bottoming at -16.8 points in October last year.

But, it started improving after the European Central Bank cut deposit rates in September last year and reintroduced QE in November. The trade deal between US and China in January, as well as the Brexit deal improved the sentiment further and in December, the Sentix consumer confidence indicator came out of the negative territory in December.

In January, it improved further to 7.6 points, but cooled off in February to 5.2 points, as coronavirus broke out in China. This month the virus has come to Europe, particularly in Italy, and I was expecting this indicator to weaken further and probably fall into negative territory again.

It turned negative indeed, and missed expectations of -11.4 points, coming at -17.1 points instead. So, we’re back in red, but everyone sort of expected that. EUR/USD didn’t mind much since markets are focused on coronavirus, but it will catch up eventually.