German Consumer Confidence Delivers EUR Support

Following a relatively quiet Asian session on the economic calendar, it was yet another relatively quiet day on the Eurozone economic calendar.

German consumer sentiment was in focus going into the European open.

Confidence Improves but Fails to Reverse the Lockdown Shock

For March, the GfK is forecasting a pickup in consumer sentiment from -15.5 (revised) to -12.9. Economists had forecast an increase to -14.3.

While coming in ahead of economists’ forecasts, the improvement was not enough to reverse the deterioration from February.

For February, the GfK had forecasted consumer sentiment to slide from -7.5 to -15.6.

According to the GfK press release:

• Consumer sentiment began to recover in February after the collapse in confidence in response to the lockdown measures introduced at the start of the year.
• There were improvements in both economic and income expectations, with propensity to buy also on the rise.
• The improvement in consumer sentiment was also supported by a decline in propensity to save.
• After as much as a 37-point slide at the start of the year, the propensity to buy indicator increased by 7.4 points.
• In spite of the rise, the indicator remained 46 points lower than the same time last year.
• Income expectations increased by around 9.4 points after 4 consecutive monthly falls.
• By contrast to the other indicators, the economic outlook indicator was higher than the same time a year ago. In February, the indicator increased by 6.7 points to 8 points.

Market Impact

Ahead of the stats, it was another mixed start to the day for the EUR, which fallen to a pre-stat current day low $1.21559 before rising to a current day high $1.21829.

Upon the release of the inflation figures, the EUR slid from $1.21813 to a post-stat low $1.21680 before finding support.

At the time of writing, the EUR was up by 0.14% to $1.21787. All-in-all, the numbers were EUR positive, with the indicators suggesting a pickup in spending.

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