Summary: Households slightly less pessimistic in May; still well below long-term average; euro-zone bond yields slightly lower
EU consumer confidence plunged during the GFC and again in 2011/12 during the European debt crisis. Since early 2014, it has been at average or above-average levels, rising to a cyclical peak at the beginning of 2018. Even after it dropped back significantly in late 2018, the index remained at a level which corresponds to significant optimism among households until a substantial drop took place in April 2020. The latest reading indicates households have become slightly less pessimistic.
The May survey conducted by the European Commission indicated household confidence has made a small recovery, albeit to still-depressed level. The EC’s Consumer Confidence index recorded a figure of -18.8, just above the -19.0 which had been expected and a small gain from April’s final figure of -22.0. The average reading since the beginning of 1985 has been -11.6.
The report had little effect on major European bond markets. At the end of the day, yields on German 10-year bunds remained unchanged at -0.49% while French 10-year OATs had shed 2bps to -0.04%.