Summary: Euro-zone households more pessimistic in September; consumer confidence Index down 3.8 points; well below long-term average, lower bound of “normal” readings; euro-zone bond yields higher.
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. However, recent readings have been extremely low by historical standards.
Consumer confidence deteriorated in September according to the latest survey conducted by the European Commission. Its Consumer Confidence Indicator recorded a reading of -28.8, below the generally expected figure of -24.6 as well as August’s revised figure of -25.0. This latest reading is well below the long-term average of -11.6 as well as outside the lower end of the range in which “normal” readings usually occur.
Sovereign bond yields rose strongly in major euro-zone bond markets on the day. By the end of it, the German 10-year bund yield had gained 9bps to 1.96% while the French 10-year OAT yield finished 13bps higher at 2.54%.