24 Mar 2015
Consumer confidence returning to the Eurozone – ING
FXStreet (Barcelona) - Peter Vanden Houte, Chief Economist at ING, reviews yesterday’s eurozone consumer confidence data release, and further notes that the declining oil and unemployment, and boosting equities is positively contributing to consumption.
Key Quotes
“The flash estimate of Eurozone consumer confidence jumped to a stronger than expected -3.0 in March, the highest level since July 2007, after having reached -6.7 in February. This was the fourth consecutive improvement in consumer sentiment. The combination of low oil prices and declining unemployment is clearly working its magic.”
“The impact of QE on consumption is less clear cut. With QE pushing down interest rates on savings, households might be enticed to spend more or alternatively save more (to keep their income from savings stable).”
“We believe that the first impact is still bigger in the Eurozone, although there might be differences between the member states.”
“On top of that, the more upbeat mood on the stock markets on the back of QE could create wealth effects, positively contributing to higher consumption expenditure.”
“All in all, yesterday’s figure shows that confidence is clearly returning to the Eurozone, the first prerequisite to higher domestic demand.”
“Barring a Greek exit (25% probability in our view), we should expect a gradual strengthening of growth in the course of the year, yielding an average GDP growth of 1.4% in 2015.”
Key Quotes
“The flash estimate of Eurozone consumer confidence jumped to a stronger than expected -3.0 in March, the highest level since July 2007, after having reached -6.7 in February. This was the fourth consecutive improvement in consumer sentiment. The combination of low oil prices and declining unemployment is clearly working its magic.”
“The impact of QE on consumption is less clear cut. With QE pushing down interest rates on savings, households might be enticed to spend more or alternatively save more (to keep their income from savings stable).”
“We believe that the first impact is still bigger in the Eurozone, although there might be differences between the member states.”
“On top of that, the more upbeat mood on the stock markets on the back of QE could create wealth effects, positively contributing to higher consumption expenditure.”
“All in all, yesterday’s figure shows that confidence is clearly returning to the Eurozone, the first prerequisite to higher domestic demand.”
“Barring a Greek exit (25% probability in our view), we should expect a gradual strengthening of growth in the course of the year, yielding an average GDP growth of 1.4% in 2015.”