Summary: Euro-zone consumer sentiment improves again in October, below expectations; consumer confidence index still below long-term average; euro-zone bond yields barely move.
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 has improved again, according to the latest survey conducted by the European Commission over the first three weeks of October. Its Consumer Confidence Indicator recorded a reading of -12.5, below the generally expected figure of -12.0 but up from September’s reading of -12.9. This latest reading is still below the long-term average of -10.5 but it is now well above the lower bound of the range in which “normal” readings usually occur.
Sovereign bond yields in major euro-zone bond markets barely moved on the day. By the close of business, German and French 10-year yields had both returned to their respective starting points at 2.31% and 3.04%.