EU consumer confidence plunged during the GFC and again in 2011/12 during the European debt crisis. Since early 2014, it has been at average or above-average levels, rising to a cyclical peak at the beginning of 2018. However, it dropped back significantly in late 2018, albeit to still-elevated levels, at about the same time as doubts emerged over the US economy’s robustness. Since then, it has slowly been recovering and the latest survey of euro-zone households indicates this process has continued despite lower GDP growth forecasts and a relatively high unemployment rate which has been improving only slowly.
The latest survey conducted by the European Commission indicates EU household confidence has recovered from June’s fall. The latest reading produced a small gain in the EC’s Consumer Confidence indicator from June’s figure of -7.2 to -6.6 in July.
The reading easily beat the market’s expected figure of -7.1 but it had little effect on European bond yields. By the end of the day, UK 10-year gilts yields had shed 2bps to 0.69% while German and French 10-year yields had both slipped 1bp to -0.35% and -0.09% respectively.