The ICI measures institutional investor trades to determine changes in risk appetite. A reading of 100 is 'neutral' and indicates that investors are neither increasing nor decreasing their long-term allocations to risky assets.
Global confidence climbed 5.8 points to 95.5 from the previous month’s reading of 89.7, following a huge increase in confidence from Asia, where confidence rose from 105.9 points to 118.6.
North America also saw gains in confidence, with the ICI for the region rising from 89.6 to 92.3 points, though ICI developer Kenneth Froot noted North American institutional investors remained “risk averse” despite the increasingly optimistic economic outlook.
“It appears that much of the risk sentiment is influenced by the US politics, with the focus shifting to the upcoming presidential election and its implications,” he said.
State Street Global Exchange executive vice president Jessica Donohue commented that persistent low inflation, combined with “a subdued economic outlook”, were contributing to weak global confidence.
“Regionally, inaction by the European Central Bank has prompted stock market volatility and has dented European sentiment even further,” she added.
“Meanwhile, investors are more optimistic on Asia, likely encouraged by continued policy support in China.”
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