Summary: Euro-zone households more optimistic in May; above pre-pandemic values; index above consensus expectation, long-term average; major euro-zone bond yields stable/down a little.
EU consumer confidence plunged during the GFC and again in 2011/12 during the European debt crisis. After bouncing back through 2013 and 2014, it fell back significantly in late 2018 but only to a level which corresponds to significant optimism among households. Following the plunge which took place in April 2020, a recovery began a month later, with household confidence returning to above-average levels in March 2021.
The May survey conducted by the European Commission indicated its Consumer Confidence index increased to -5.1, higher than pre-pandemic readings at the end of 2019. The reading was above the -7.5 which had been generally expected and April’s figure of -8.1. The average reading since the beginning of 1985 is -11.7.
Sovereign bond yields either remained stable or fell a little in major European bond markets on the day. By the end of it, the German 10-year bond yield had shed 2bps to -0.12% while the French 10-year yield finished unchanged at 0.22%.