The University of Michigan released a flash consumer sentiment report for November at 3:00 pm GMT today. This was a sole and therefore key release scheduled for today's afternoon. Market expected headline Consumer Sentiment index to remain virtually unchanged from a month ago. An uptick was expected in Expectations subindex while Current Conditions subindex was seen ticking lower compared to a month ago. Short-term inflation expectations were seen easing compared to October.
Actual report turned out to be quite a surprise. Headline index dropped to 60.4, driven by a drop in Current Conditions subindex. Meanwhile, inflation expectations spiked with 5-10 year inflation expectations climbed to 3.2% - the highest level since 2011.
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- Consumer Sentiment index: 60.4 vs 63.7 expected (63.8 previously)
- Current Conditions subindex: 65.7 vs 70.3 expected (70.6 previously)
- Expectations subindex: 56.9 vs 61.0 expected (59.3 previously)
- 1-year inflation expectations: 4.4% vs 4.0% expected (4.2% previously)
- 5-10 year inflation expectations: 3.2% vs 3.0% expected (3.0% previously)
EURUSD took a hit following a spike in inflation expectations and weaker-than-expected consumer sentiment reading. EURUSD tested 1.0666 support zone following the release but so far no breakout lower occurred. Source: xStation5
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