Summary: Euro-zone households less pessimistic in August; consumer confidence Index up 2.1 points; still 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 improved a little in August according to the latest survey conducted by the European Commission. Its Consumer Confidence Indicator recorded a reading of -24.9, above the generally expected figure of -28.0 as well as July’s -27.0. This latest reading is still 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 moderately in major euro-zone bond markets on the day. By the end of it, the German 10-year bund yield had added 3bps to 1.33% and the French 10-year OAT yield had gained 4bps to 1.93%.