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 at about the same time as doubts emerged over the US economy’s robustness. Since then, it has remained in a fairly narrow range.
The January survey conducted by the European Commission indicated household confidence remained at robust levels. The latest published reading of its Consumer Confidence index recorded a figure of -8.1, the same reading as in November and still at an above-average figure. The average reading since the beginning of 1985 has been -11.6.
The reading was almost in line with the expected figure of -8.0 but German and French sovereign bond yields both fell a little, possibly the result of the ECB chief’s comments on the day rather than the survey’s figures. By the end of the day, yields on German and French 10-year bonds had fallen by 5bps to -0.31% and -0.06% respectively.