The economic confidence indicator dropped from an upwardly revised 94.5 to 92.8, while only a marginal decline was expected (to 94.2). The outcome exactly matches the figure seen in December, which was the weakest reading in more than 2 years time. The details show a deterioration in industrial (-9.0 from -7.1), services (-2.4 from -0.3) and construction (-27.4 from -26.7) confidence, while retail confidence improved slightly, from -12 to -11.4. Consumer confidence weakened marginally from the first estimate (-19.9 from -19.8). National details show only an improvement Greece (77.3 from 75.7), the Netherlands (90.6 from 89.4) and Portugal (78.5 from 77.1). Economic confidence weakened sharply in Italy (83.1 from 88.8) and deteriorated also in Belgium (94.1 from 95.8), Germany (103.3 from 104.3), Spain (89.1 from 90.9), France (95.2 from 95.6) and Austria (97.9 from 98.6). This outcome provides further evidence that the economic climate is weakening again in Europe after already disappointing PMI’s, smashing hopes for an improvement at the start of the second quarter.
According to the first estimate, German HICP inflation eased from 2.3% Y/Y to 2.2% Y/Y in April, in line with expectations and reaching the lowest level since February 2011. On a monthly basis, inflation rose by 0.2% M/M, while an increase by 0.1% M/M was expected. National details show that upward price pressures were mainly based in transportation, healthcare, education and package holidays. These were partly offset by lower prices for seasonal food and heating oil. After an uptick in February, German CPI inflation is now easing again, but it is doubtful whether inflationary pressures will slow significantly further in the coming months, partly due to still high energy prices.