Summary: Euro-zone households slightly more pessimistic in October; below consensus expectation; still below long-term average; German confidence down for eighth consecutive month; major euro-zone bond yields up slightly.
EU consumer confidence plunged during the GFC and again in 2011/12 during the European debt crisis. It fell back significantly in late 2018 but only to a level which corresponds to significant optimism among households. After a plunge took place in April 2020, a recovery of sorts took place through May and June. More recent readings have generally stagnated.
The October survey conducted by the European Commission indicated its Consumer Confidence index decreased to -15.5. The reading was slightly below the -15.0 which had been expected and lower than September’s figure of -13.9. The average reading since the beginning of 1985 has been -11.7.
“Confidence within Germany has now fallen for eight months in a row, with the recent COVID-19 outbreaks not helping the situation,” said ANZ economist Kishti Sen.
The report had a modest effect on major European bond markets. By the end of the day, German and French 10-year sovereign bond yields had each gained 2bps to -0.57% and -0.29% respectively.