Summary: Euro-zone consumer sentiment a little less pessimistic in February, index more slightly than expected; consumer confidence index well below long-term average; euro-zone bond yields rise materially.
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 in February according to the latest survey conducted by the European Commission. Its Consumer Confidence Indicator recorded a reading of -15.5, slightly above the generally expected figure of -15.8 as well as January’s reading of -16.1. This latest reading is still well 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 rose materially on the day. By the close of business, the German and French 10-year bond yields had both gained 7bps to 2.45% and 2.93% respectively.