Michigan Consumer Sentiment Exceeds Analyst Expectations

Key Insights

• Michigan Consumer Sentiment increased from 59.2 in May to 64.4 in June. 
• Chicago PMI grew from 40.4 to 41.5.
• SP500 moved towards yearly highs amid rising demand for riskier assets. 

On June 30, the University of Michigan released the final reading of the Michigan Consumer Sentiment report for June. The report showed that Consumer Sentiment improved from 59.2 in May to 64.4 in June, compared to analyst consensus of 63.9.

Current Economic Conditions improved from 64.9 in May to 69 in June, while the Index of Consumer Expectations increased from 55.4 to 61.5.

The University of Michigan commented: “Overall, this striking upswing reflects a recovery in attitudes generated by the early-month resolution of the debt ceiling crisis, along with more positive feelings over softening inflation.”

Today, traders also had a chance to take a look at Chicago PMI report for June. The report showed that Chicago PMI increased from 40.4 in May to 41.5 June, compared to analyst consensus of 44.

Treasury yields have moved higher today as traders remained focused on the hawkish Fed. The rebound of Consumer Sentiment provides Fed with another reason to push the federal funds rate higher.

SP500 tested new highs near the 4450 level after the release of the Consumer Sentiment report. Traders ignore rate hike fears and focus on the strength of the economy. The better-than-expected GDP report, which was released on Thursday, remains an important positive catalyst for stocks.

U.S. Dollar Index is losing ground despite rising Treasury yields. Demand for safe-haven assets declines, which is bearish for the American currency.

Gold has recently moved back above the $1915 level as traders focused on U.S. dollar’s pullback. The better-than-expected Consumer Sentiment report provided additional support to gold markets.

For a look at all of today’s economic events, check out our economic calendar.