EU Economic Confidence Improves, but Inflation Expectations Head Down
The consumer confidence in the Eurozone remains in negative territory, despite the improvement since May. The recent coronavirus hype and certain restrictions are keeping the consumers wary of the future, so they are not that confident. Economic confidence is also improving, but it still remains way below the pre-covid February level.
We are seeing a small improvement in all other confidence indicators, but they still remain negative, so the economic situation in Europe doesn’t seem promising at all, which should turn the Euro bearish soon.
- Economic confidence 91.1 points vs 89.0 expected
- August economic confidence was 87.7 points; revised to 87.
- September final consumer confidence -13.9 vs -13.9 prelim
- Industrial confidence -11.1 points vs -10.0 expected
- Prior industrial confidence was -12.7 points; revised to -12.8
- Services confidence -11.1 points vs -16.3 expected
- August services confidence was -17.2 points
The prior month’s release can be found here. The boost to economic confidence continues to hint at more optimism surrounding the euro area economic outlook, but it remains to be seen if such optimism can be justified considering recent virus developments.
The jump in the services confidence is certainly at odds with what PMI data , which showed that this sector fell in contraction this month. So there’s that to consider when trying to account for the optimism above. What’s more concerning for the ECB is that consumer inflation expectations slumped to 12.5 in September from 16.9 in August. That certainly doesn’t paint a pretty picture with regards to the inflation outlook ahead of the Eurozone print later in the week.
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