Eurozone Consumer Confidence Soars to Highest Level in a Year
Quick Summary
Consumer confidence in the Eurozone has risen for the fifth month in a row, reaching its highest level in a year. This is likely due to a mild winter which helped reduce energy consumption and allayed fears of potential shortages, as well as government subsidies to support jobs and limit the hit to disposable incomes from high energy prices. Meanwhile, European stocks have been fluctuating as investors weigh the prospect of higher interest rates, while the UK’s financial regulator is launching a post-Brexit review of the asset management industry. Finally, Dutch intelligence authorities have warned of Russian attempts to sabotage the Netherlands’ energy infrastructure.
Full Story – Live news: Eurozone consumer confidence rises to one-year high
Eurozone consumer confidence rises to one-year high
Consumer confidence in the eurozone improved for the fifth consecutive month, reflecting rising hopes that the bloc’s economy could suffer only a mild recession despite the energy crisis caused by Russia’s invasion of Ukraine.
The European Commission said the flash estimate of its consumer confidence indicator, based on a survey of households, was up 1.7 points to minus 19 in the eurozone. That was its highest level for a year, although it remained below the long-term average.
Sentiment among European consumers has been buoyed by the relatively mild winter, which helped to reduce energy consumption, boosted gas storage levels and allayed fears of potential shortages.
European wholesale gas prices had fallen back to their lowest level since before Moscow attacked Ukraine a year ago, increasing hopes that eurozone inflation could continue to fall after hitting a record high above 10 percent in October.
Governments have also provided large subsidies to support jobs and limit the hit to disposable incomes from high energy prices, while wage growth in much of Europe has more than doubled to almost 5 percent.
European shares fluctuate as interest rate fears shadow markets
European stocks gave up early gains by Monday afternoon as investors weighed the prospect that the world’s biggest central banks would keep interest rates higher for longer to curb inflation.
The region-wide Stoxx 600 rose 0.2 percent, while France’s Cac 40 eased 0.1 percent. Trading activity was more muted as US markets were closed for Presidents’ Day.
Investors have been forced in recent weeks to review their forecasts for the peak of interest rates in the US following several stronger-than-expected economic data reports.
The numbers indicated that the US economy had not fully felt the Federal Reserve’s year-long attempt to curb growth and bring down inflation through an aggressive campaign of rate increases. Sovereign debt prices have fallen, and yields have risen in response to the data.
Read more on today’s markets here.
UK regulator launches post-Brexit review of asset management
The UK’s financial regulator is looking at ways to improve liquidity management in the country’s £11tn asset management industry as part of a post-Brexit review of how it regulates the sector following a blow-up in the pensions market last year.
On Monday the Financial Conduct Authority announced a consultation on improving regulation of the UK’s 2,600 asset management firms. The regulator said it was seeking to boost competition, encourage innovation and protect investors.
The FCA said that future rules around liquidity management — which determine how funds ensure they can meet investor requests to withdraw their money — must be looked at in the context of “the good functioning of markets” as well as “protecting consumers” in light of the “growth of the fund’s industry”.
A sell-off in the gilts markets last autumn exposed liquidity and operational weaknesses in the market for liability-driven investing, a popular strategy among the UK’s “defined benefit” pension schemes to help manage their funding risks. The crisis threatened to destabilize the wider financial system.
The Netherlands warns of Russian attempts to sabotage its energy infrastructure
Dutch intelligence authorities have warned of Russian attempts to sabotage its North Sea energy infrastructure and…
