Investor confidence up in March

The global State Street investor confidence index (ICI) increased to 93.9 in March, up two points from its February’s reading, thanks to the 12.6 point growth in the European ICI to 90.7.

The index also found North American investor confidence rose by 1.1 points to 94.4, while the Asian ICI dropped 4.9 points to 93.2.

Michael Metcalfe, head of global macro strategy, State Street Global Markets, said the first quarter of 2021 brought new challenges for investor confidence, in particular with regards to whether higher bond yields were reflecting the reflation trade or whether they were a threat to it.

“After seeing it fall sharply for two-months in a row, investors’ confidence, led by Europe, stabilised and rose modestly in March,” he said.

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“While the overall level of the index suggests investors should remain watchful of risky assets, the modest improvement in confidence suggests they are learning to live with higher yields – for now at least.”

The index measured investor confidence and risk appetite. A reading of 100 was neutral and indicated the level at which investors were neither increasing nor decreasing their long-term allocations to risky assets.