By Paul Hawtin
This week, our global sentiment indicators on the euro-zone region reached their lowest level yet for 2012. At Derwent Capital we use a simple 0%-to-100% scale to measure global sentiment on any stock, commodity, currency or region — 0% being the most negative reading and 100% being the most positive. This morning our euro-zone rating was at 22.6%, which we would describe as "very negative".
So what does this mean?
A sentiment rating this low suggests impending weakness within the region on any euro-related asset, such as the FTSE100 index UK:UKX +0.51% and the euro EURUSD +0.19% currency itself.
The equity markets have improved over the last few days on hopes the Fed will announce new stimulus measures at the FOMC meeting this afternoon. Traders could well be covering short positions into this meeting hence the brief rally which would suggest a possible shorting opportunity for those brave enough.
