Summary: Euro-zone household sentiment more pessimistic in September; consumer confidence index noticeably below long-term average, lower bound of “normal” readings; euro-zone yields increase modestly.
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 just recently.
Consumer confidence deteriorated for a second consecutive month in September according to the latest survey conducted by the European Commission. Its Consumer Confidence Indicator recorded a reading of -17.8, below the generally expected figure of -16.0 which is also the figure for August. This latest reading is still noticeably below the long-term average of -10.4 and below the lower end of the range in which “normal” readings usually occur.
Sovereign bond yields in major euro-zone bond markets increased modestly on the day. By the close of business, the German 10-year bund yield had added 1bps to 2.73% while the French 10-year OAT yield finished 3bps higher at 3.28%.