THE TAKEAWAY: European March consumer confidence weaker than expectation, previous -> poor reading reinvigorates recession speculation -> Euro falls against dollar, yen
Consumer confidence in the 17-member Euro area declined in March, missing expectations and providing fodder for speculation that Europe has not yet emerged from the recent far-reaching debt crisis. A gauge of European consumer confidence came in today at -19.1, worse than the previous -19.0 which was also the number economists had predicted for today.
Indices of economic and business confidence decreased as well. A breakdown of the data showed that confidence was the highest in Germany, while beleaguered nations like Greece and Italy had the lowest readings.
Higher than desired inflation in Europe and lagging manufacturing production have combined to lower consumer confidence in Europe, a process which could lead to further pullback in economic growth and later to recession. Markets await the release of tomorrow’s Eurozone inflation report, which will influence the ECB’s near-term policy for controlling inflation and stimulating growth.
The Euro fell after today’s release, smashing through psychological barriers at 1.3300 before continuing towards yesterday's session low.
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