The State Street Global Investor Confidence Index (ICI) is up 7.0 points to 120.8 in May, from April’s revised reading of 113.8.

North American investors showed the biggest increase with the North American ICI rising 8.0 points to 129.4, up from April’s 121.4. The Asia ICI was not far behind, rising 7.4 points to 98.6. 

“A lower dollar, stabilizing energy prices, and reduced expectations of an imminent rate hike provided tail winds to North America sentiment,” commented Kenneth Froot. 

“Investors must now wait and see whether a rebound in second quarter growth will lead to more hawkish statements from the Federal Reserve.”

The European ICI however, fell 5.5 points to 103.8. Jessica Donohue, executive vice president and chief innovative officer at State Street Global Exchange explained that Greece's ongoing negotiation with the EU was having an adverse impact on investor sentiment:

“In Europe, a rising euro, increased sovereign yields, and the continued Greek funding drama helped contribute to the decline in European confidence by 5.5 points,” she said. 

“However, the front-loading of sovereign bond purchases by the ECB before the summer months may help reverse recent trends. Meanwhile, in Asia, policy manoeuvres in China helped boost investor confidence by 7.4 points."

The ICI measures investor confidence or risk appetite quantitatively by analysing the actual buying and selling patterns of institutional investors,  as opposed to surveying their opinions.

The index assigns a precise meaning to changes in investor risk appetite: the greater the percentage allocation to equities, the higher risk appetite or confidence. A reading of 100 is neutral.