It’s been a relatively quiet start to the day on the Eurozone economic calendar. Following a relatively busy Asian economic calendar, German consumer confidence was in focus ahead of the European open.
German GfK Consumer Climate
While the propensity to buy increased once more, albeit modestly, there were marked declines in economic and income expectations.
According to the GfK,
The income indicator slid by 13 points to 9.3 points, with the economic expectation indicator tumbling by 10.4 points to 7.3 points.
As a result, GfK is forecasting a decrease of 8.8 points in consumer confidence in May 2021. This was down by 2.7 points from a revised -6.1 points from April.
Hopes for further easing of restrictions and a revival of consumption have been noticeably dampened.
Leading economic research institutes significantly scaled back their consumption forecasts for this year. According to forecasts, real private consumption spending will hardly increase at all, rising by just 0.2% compared with 2020.
Researchers had previously forecasted consumption growth of as much as 4.9% for this year. The ECB had also relied on consumer spending to fuel the economic recovery before the third wave of the pandemic hit the EU.
Economic research institutes have also downgraded the economic growth outlook for 2021 from 4.7% to 3.7% as a result of weaker consumption forecasts.
Ahead of the stats, the EUR had risen to a pre-stat and current day high $1.20932 before falling to a pre-stat low $1.20706.
In response to the prelim PMI figures, the EUR to a post-stat high $1.20786 before falling to a post stat and current day low $1.20563.
At the time of writing, the EUR was down by 0.14% to $1.20739.
Trade data and inventory figures from the U.S ahead of the FOMC policy decision and all-important rate statement and press conference.