Today's Report (11/22/2021)

In November 2021, the DG ECFIN flash estimate1 of the consumer confidence indicator2 decreased markedly in both the EU (2.1 points down) and the euro area (2.0 points down) compared to October 2021. At -8.2 points (EU) and -6.8 points (euro area), the indicator fell below (EU) or close to (euro area) its pre-pandemic level, but remains above its long-term average.


What is it?

A monthly survey of consumers in the EU, it provides a broad measure of consumer sentiment. It also probes into their perceptions towards their past and also their expected future financial conditions.

What are the fundamental effects?

It is used to gauge household spending intentions and retail sales, with a general theory that changes in consumer confidence are typically followed by corresponding changes in consumer spending. It can also be used as an indicator of the quarterly GDP figures.

How does it affect the markets?

CURRENCY - Foreign investors typically do not like when consumer confidence is lower than expected because it could suggest a weaker economy.

STOCKS - Equity traders might also be displeased if consumer confidence is lower because it could suggest that consumers are less inclined to shop so it could give the impression of lower corporate profits.

BONDS - A higher than expected reading could displease bond traders because it could lead to an acceleration in borrowing and shopping, this could fuel faster economic growth and stoke inflation.