Summary:

• University of Michigan consumer sentiment rises to 93.4
• Inflation expectations drift slightly lower to 2.6%
• US dollar remains lower on the week

The last scheduled economic release of the week has seen a small rise in the University of Michigan consumer sentiment index to 93.4 from 93.1 previously (revised lower from 95.1.) The print was marginally higher than the 93.2 expected but to put it in a fairer perspective it is the lowest barring the previous reading since October.  

There has been a significant rise in another consumer metric in the last 12 months with the Conference Board (CB) equivalent seeing a sustained rise since last summer. These two measures are historically fairly well correlated but there has been a growing divergence of late. This gives mixed signals to some extent with one survey suggesting a strong increase in consumer confidence and the other showing a slight softening. This divergence has been especially clear this week with Tuesday seeing the latest CB figure rise back close to a 16-year high whilst today’s release remains relatively low.

 

 There has been mixed messages from two consumer confidence metrics in the past 12 months with the Conference Board rising close to a 16 year high whilst the Uni Mich equivalent has drifted lower

The US dollar attempted to bounce yesterday but has come back under some selling pressure this afternoon despite a rise in both the GDP and Uni Mich. It is only some cryptocurrencies (XRP, ETH, LTC), emerging market currencies (ZAR, MXN and BRL) and the CHF that are lower against the buck with the rest of G10 all looking set for another week of gains.

 It’s been another week of declines overall for the US dollar with all G10 currencies barring the CHF gaining against the greenback