The latest Institutional Investor Confidence data from State Street showed a notable drop in the global index, but the standout and biggest driver of the drop was the European index. The indexes are designed to capture institutional investor confidence quantitatively by assessing changes in allocations to risky vs defensive assets, based on State Street’s global custodian business. The big drop in the European index reflects the softer growth momentum in the Eurozone, elevated political risk, and broader global concerns e.g. protectionism. I previously talked about how the flare-up in Eurozone credit risk pricing could take at least a couple of months to fully run its course, and this data series provides another angle on this insight. I continue to hold a cautious stance on Eurozone risk assets – and it appears European investors also feel this way.