EU Confidence Stabilizes at Low Levels

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Confidence reading across Europe remained stable but at depressed levels in September as policy efforts by the ECB and EU fiscal officials to deal with the sovereign debt crisis appeared to have eased tensions in the region. In Germany the GFK survey printed at 5.9, the same level as the month prior but bit lower than the market expected.

A gauge of economic expectations rose to -17.2 in September from -18.9 in August, indicating that consumers are a bit more optimistic going into the crucial Christmas season. On the other hand the index measuring income expectations dropped to 23.9 from 31.6, GfK said. A measure of willingness to buy remained at 33.1. Overall the consumer picture remains steady but cautious in Germany.

Meanwhile in Italy consumer confidence rose ever so slightly to 86.2 from 86.1 but not far off the historic lows of 85.7 and in France the manufacturing survey upticked to 90 from 89. The overall reading of sentiment in the region suggests that some sense of calm has emerged in Europe but it remains tenuous at best as officials continue to deal with simmering problems in the periphery such as Spain’s expected request for bailout and Greece’s ongoing struggle to plug its finances.

The data had little impact on EURUSD trade as the currency continued to churn between 1.2950 and 1.2900 buffeted by end of the month flows that saw EURGBP drop more than 30 points in late Asian session trade.

Boris Schlossberg
Managing Director

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