German GfK Consumer Climate Indicator Climbs to -24.2 for May

Bob Mason
Published: Apr 25, 2024, 06:19 GMT+00:00

Key Points:

  • The German GfK Consumer Climate Indicator increased from -27.3 to -24.2 for May.
  • Willingness to save climbed higher despite a marked improvement in income expectations.
  • Up next are US GDP numbers for Q1 2024 amidst fading investor bets on multiple 2024 Fed rate cuts.
German Gfk Consumer Climate Indicator

In this article:

On Thursday, April 25, the German economy was in the spotlight again, with German consumer confidence in focus.

German GfK Consumer Climate Indicator Advances to -24.2

The German GfK Consumer Climate Indicator advanced from -27.3 to -24.2 for May. Economists predicted an increase to -25.9.

According to the April survey,

  • The willingness to save limited the upside in the headline indicator, rising by 2.5 points to 14.9 points. In April 2023, the willingness to save stood at 1.8 points.
  • Income expectations advanced by 12.2 points to 10.7 points, the highest level since January 2022 (16.9 points).
  • The willingness to buy increased by 2.7 points to -12.6. Nevertheless, the willingness to buy remained low, highlighting ongoing uncertainty about the labor market and the economy.
  • Economic expectations rose by 3.8 points to 0.7 points. Year-on-year, economic expectations were down 13.6 points.

Consumer Confidence and June ECB Rate Cut Puts

The sub-components of the survey supported investor expectations of a June ECB rate cut. Despite the jump in income expectations, consumer plans to save signaled a lackluster demand environment. Downward trends in consumer spending could dampen demand-driven inflation and support multiple ECB rate cuts.

EUR/USD Reaction to German GfK Consumer Climate Survey

Before the release of the German GfK Consumer Climate survey, the EUR/USD fell to a low of $1.06916 before rising to a high of $1.07130.

In response to the GfK Consumer Confidence numbers, the EUR/USD fell to a low of $1.07114 before rising to a high of $1.07131.

On Thursday, April 25, the EUR/USD was up 0.13% to $1.07122.

EUR/USD reacts to the GfK Consumer Climate Indicator for May 2024.
250424 EURUSD 3 Minute Chart

Up Next

ECB Executive Board member Isabel Schnabel is on the calendar to speak. Views on inflation and post-June interest rate plans need consideration.

Investors should also consider the US economic calendar. Q1 2024 GDP and weekly jobless claims figures warrant investor attention. Barring an unexpected spike in US jobless claims, the GDP numbers will likely impact Fed interest rate cut bets more.

Economists forecast the US economy to grow by 2.5% in Q1 2024 after expanding by 3.4% in Q4 2023.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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