Summary: Euro-zone consumer sentiment improves slightly again in May, index a touch less than expected; consumer confidence index still substantially below long-term average; Westpac: index at its least-pessimistic level since early 2022; euro-zone bond yields rise moderately.
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 from March 2021. However, readings subsequent to early 2022 were extremely low by historical standards until recently.
Consumer confidence improved a little more in May according to the latest survey conducted by the European Commission. Its Consumer Confidence Indicator recorded a reading of -14.3, a touch below the generally expected figure of -14.2 but up from April’s reading of -14.7. This latest reading is still substantially below the long-term average of -10.4 and just above the lower bound of the range in which “normal” readings usually occur.
“While still well below pre-pandemic averages, confidence is sitting at its least-pessimistic [level] since early 2022,” said Westpac economist Jameson Coombs.
Sovereign bond yields in major euro-zone bond markets rose moderately on the day. By the close of business, German and French 10-year bond yields had both gained 5bps to 2.59% and 3.08% respectively.