Towards the end of the month, not only do we get a whole raft of hard economic data, we also get a bunch of confidence indicators, tracking consumers, business and investors. On a global scale, my global confidence shocks & surprises is still slightly positive, but has been in very steep decline since late September. That global signal, however, isn't really showing up how regional confidence indicators are now moving in different directions.
We got a significant foretaste today, from State Street's global investor confidence index, which tracks risk appetite by what investors are actually buying The global signal fell 3.8pts to 80.1, which was the weakest since May. There are distinctly opposite trends coming from Asia and Europe. Asia's confidence rose 7.2pts to 91.7, which is just very slightly higher than 2019's average; but Europe's dropped 17.4pts to 92.8, which is weaker even than the lowest points of the initial lockdown,m and in fact the weakest since August 2019. The US indicator, too, showed a modest 2pt decline in risk appetite to 76.8, which remains higher than pandemic levels, and quite significantly higher than the 2019 average of 71.9.
The recovery of confidence in Asia was confirmed by S Korea's Oct consumer confidence index, which rose 12.2pts to 91.6, which was the best since March, and was almost a return to pre-Covid normality. The details suggest a powerful return of optimism: readings of current economic conditions were up 16pts to 58, and economic expectations rose 17pts to 83.
France's Oct onsumer confidence dipped only 1pt to 94, but that's pretty grim: even at the worst of the initial coronvairus wave,m the index only sank to 92. And when you look at the details, the index is being supported by improved reviews of the last 12 months, whilst expectations were falling quite hard.
Many more confidence reports coming over the next two days.
