The global ICI index – which measures risk appetite by analysing the buying and selling patterns of institutional investors – dropped from June’s revised reading of 119.3 down to 114.7 for July, according to State Street Global Exchange.
While European sentiment rose to 121.2 from last month’s reading of 113.7, Asian sentiment fell to 92.1 from 96.2 in June and US sentiment declined from 116.1 to 110.3 for July.
State Street Global Exchange head of research and advisory services Jessica Donohue said despite the decline in sentiment in July, North American confidence remains relatively upbeat.
“Institutions appear to be in a wait-and-see mode this summer as they contemplate the future path of Federal Reserve monetary policy,” she said.
Harvard Business School Professor Kenneth Froot said stronger growth metrics in Europe and the UK and well-received ECB policy actions “helped boost European confidence, which reached the strongest level since May of 2007”.
“Meanwhile rising geopolitical tensions may have weakened Asian investor sentiment,” said Mr Froot.
“It will be interesting to see if continued growth in China and political reform in select Asian countries, including India and Indonesia, lead to stronger sentiment going forward.”
