27thFebruary 2024Tuesday The UnitedStates is set to unveil its...

27^thFebruary 2024

Tuesday

The UnitedStates is set to unveil its Consumer Confidence Index on February 27th, markinga significant announcement that could impact markets and economic forecastsnationwide. Meanwhile, Germany is set to announce its Consumer Climate report.

USD – CB Consumer Confidence

This compositeindex, gauging financial confidence, is derived from a survey of approximately3,000 households and serves as a pivotal leading indicator of consumerspending, a major component of overall economic activity. Released monthly onthe last Tuesday, it assesses respondents’ perceptions of both current andfuture economic conditions, including labor market dynamics, businessenvironment, and the broader economic landscape.

In a notableuptick, the Conference Board Consumer Confidence Index had climbed to 114.8 inJanuary, marking its highest level since December 2021 and continuing athree-month streak of increases from a revised 108.0 in December. This surgehad reflected an optimistic shift in consumer sentiment, particularly evidentin the Present Situation Index, which had leaped to 161.3 from 147.2,indicating a more positive view of current business and labor marketconditions. Similarly, the Expectations Index, which gauges short-term economicprospects, had risen to 83.8 from 81.9.

Dana Peterson,Chief Economist at The Conference Board, had attributed the January boost inconsumer confidence to a combination of slowing inflation, the anticipation ofreduced interest rates, and strong employment conditions, despite companies’tendency to retain labor. The uplift in sentiment had spanned all agedemographics, with the most significant increase among consumers aged 55 andabove, and was observed across all income brackets except for the highestearners, with households making over $125,000 experiencing a minor decline.

Despite ongoingconcerns about inflation, as indicated by write-in responses, consumerinflation expectations had dropped to a three-year low. While there had been aslight decrease in buying intentions in January, overall assessments of incomeand personal financial situations had remained strong for the present and theupcoming six months. Furthermore, the perceived likelihood of a U.S. recessionin the next 12 months had continued to diminish, aligning with the rise in theExpectations Index above 80, signaling a cautiously optimistic economic outlookamong consumers.

TL;DR

• Consumer Confidence Index rose to 114.8 in January, highest since December 2021.
• Present Situation Index jumped to 161.3, reflecting positive views on business and labor.
• Expectations Index increased to 83.8, indicating better short-term economic prospects.
• Confidence boost due to slowing inflation, potential for lower interest rates, and strong employment.
• Sentiment improved across all ages, especially among those 55+, but dipped for highest earners (> $125,000).
• Inflation concerns persist, but consumer inflation expectations at a three-year low.
• Slight decrease in buying intentions, but strong income and financial situation assessments.
• Reduced perceived likelihood of a U.S. recession in the next 12 months.

The CBConsumer Confidence projection is set at 114, slightly lower thanthe previous figure of 114.8.

The forthcomingrelease of the CB Consumer Confidence report is set for Tuesday at3:00 PM GMT.

The last time,the US CB Consumer Confidence report was announced on the 30^thof January, 2024. You may find the market reaction chart (GBPUSD M5) below:

USD – Durable Goods Orders

The durablegoods orders announcement in the US is a key economic indicator that reflectsnew orders placed with domestic manufacturers for delivery of factory hardgoods in the near term or future. Durable goods are items intended to last morethan three years, such as vehicles, appliances, and machinery. This dataprovides insights into manufacturing activity, business investment, andconsumer confidence. A rise in durable goods orders often suggests an uptick ineconomic activity, indicating that businesses and consumers are spending moreon equipment and high-value items, while a decline may signal a slowdown. Thereport is closely watched by economists, investors, and policymakers as it caninfluence monetary policy decisions and market trends.

In December2023, the United States saw no significant change in its manufactured durablegoods orders, following a notable 5.5 percent increase in November. This wascontrary to the anticipated 1.1 percent growth expected by the market. Whentransportation items are excluded, there was a modest rise of 0.6 percent innew orders, and a 0.5 percent increase when defense orders are removed from thecalculation. The growth was primarily fueled by the primary metals sector,which has seen gains in three of the past four months, climbing by $0.4 billionor 1.4 percent to reach $27.1 billion.

TL;DR

	Category	December 2023 Change	Context or Comparison
1	Overall Manufactured Durable Goods Orders	Virtually unchanged	Following a 5.5% increase in November
2	Excluding Transportation	+0.6%
3	Excluding Defense	+0.5%
4	Primary Metals Sector	+1.4% ($0.4 billion)	Gains in 3 of the last 4 months, reaching $27.1 billion

The forecast forUS Durable Goods Orders data is reading a decrease of 4.5%, fromthe previous 0% change compared to the last time.

The data is setto be released at 03:30 PM GMT on the 27^th of February, 2024.

The last time,the US Durable Goods Orders data was released on the 30^th ofJanuary, 2024. You may find the market reaction chart (USOil M5) below:

EUR – GfK Consumer Climate

The GfK ConsumerClimate Indicator derives from a survey conducted with over 2,000 participantsaged 14 and older. This survey assesses their outlook on income, propensity topurchase, and inclination towards saving. The indicator's components aredetermined by subtracting the count of negative responses from the positiveones for each question posed. These components can range from -100 to +100points, with the zero-point marking the historical average.

Heading intoFebruary 2024, the GfK Consumer Climate Indicator for Germany saw an unexpecteddrop to -29.7 from a revised January figure of -25.4. This latest reading,significantly below the anticipated -24.5, marks the lowest point in nearly ayear, driven by decreases in income expectations (falling to -20.0 fromJanuary's -6.9), buying willingness (-14.8 from -8.8), and economic outlook(-6.6 from -0.4). Concurrently, the saving inclination soared to its highestlevel since August 2008, reaching 14.0 compared to the previous 7.3. RolfBürkl, a consumer expert at NIM, commented on the findings: "Theseoutcomes delay any expectations of an imminent revival in the consumerclimate." He also noted that the combination of ongoing crises, conflicts,and sustained high inflation levels continues to disrupt consumer confidenceand hinder any improvement in consumer sentiment.

TL;DR

	Metric	February 2024 Value	January 2024 Value	Notes
1	GfK Consumer Climate Indicator	-29.7	-25.4	Lowest in nearly a year, below forecasts of -24.5
2	Income Expectations	-20.0	-6.9	Significant decline
3	Propensity to Buy	-14.8	-8.8	Decreased willingness to purchase
4	Economic Outlook	-6.6	-0.4	Deterioration in economic perspective
5	Propensity to Save	14.0	7.3	Highest since August 2008, indicating increased saving behavior
6	Expert Commentary			Rolf Bürkl: Recovery in consumer climate further delayed due to crises, wars, and high inflation

The forecast forthe German GfK Consumer Climate Indicator report is reading anincrease to -28, from the previous -29.7.

The announcementfor the GfK Consumer Climate Indicator report is set to be released at 9:00am GMT on Tuesday the 26^th of February, 2024.