Summary: Euro-zone households less optimistic in July; index falls 1.1 points to -4.4; still at elevated level; euro-zone sovereign bond yields lower.
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.
Consumer confidence deteriorated in July according to the latest survey conducted by the European Commission. Its Consumer Confidence index recorded a reading of -4.4, a level which could be still considered as elevated. The reading was below the -3.0 which had been generally expected and less than June’s figure of -3.3. The average reading since the beginning of 1985 is -11.6.
The report was released on the same day as the ECB’s July policy meeting where policy rates and asset purchase programmes were left unchanged. Sovereign bond yields fell in major euro-zone bond markets on the day and by the end of it, German and French 10-year bond yields had each shed 4bps to -0.43% and -0.09% respectively.