Euro Zone consumer confidence plunges to multi-year lows

The release of Consumer confidence data for June-22 in the Euro Zone showed that the index plunged to a new multi-year low at -23.6 (see below chart), much lower than expected by market players as households are facing soaring energy and food prices and economists warn about the heightened risk of a recession. In the US, Jerome Powell, the Fed governor, warned that a recession in the US is “certainly a possibility” and that some factors in play are out of the control of its institution, referring to the Ukraine war or China’s zero-covid policy. US equities reacted in a neutral way to his comments, while the 10-year US treasury rate is still holding above the 3% mark.

On the agenda today, the release of PMI figures will be closely watched to assess a bit more precisely recession risks in Europe and in the US. Note that the French business climate index for the manufacturing sector surprised on the upside this morning. But the French manufacturing PMI dropped to 51 in June-22 amid inflationary pressures and lingering supply chain disruptions, below market consensus and just above the 50 mark that indicates growth. The French Services MI is also down to 54.4, below market consensus as well, clouding further the economic outlook for the second economy of the Euro Zone.