The US consumer remains upbeat about the US economic recovery. According to the Conference Board’s Consumer Confidence increased for the sixth consecutive month in a row and is now back around pre-pandemic levels.
Forecasts had expected a slight deterioration but markets were met with a higher than expected 129.1 (123.9 exp) which was up slightly from the upwardly revised 128.9 in June.
This also included a continued increase in the Present Situation component at 160.3 (157.7 in June). The Expectations I
The one slight caveat with being bullish on this is that due to last month’s revision, confidence only increased at a marginal level in June. Furthermore, the Expectations component marginally ticked lower to 108.4 (from 108.5).
It is too early to say whether this will be the high watermark in the recovery in consumer confidence, but confidence over the short term outlook remains steady.
Other data announced: Richmond Fed Manufacturing
We have also had the Richmond Fed Manufacturing Index out this afternoon and the data has come in with a significant positive surprise. Consensus had been looking for a drop back to 20, however, along with a significant upward revision (another) in June to +26, the July Richmond Fed Manufacturing index increased further to +27.
The regional Fed surveys continue to remain strong and suggest that PMI data will likely also remain strong.
Initial Market Reaction
This is all broadly positive for the US economy and USD positive
- EUR/USD -10 pips
- 10 year Treasury yield +1 basis point