Eurozone consumers under water

Sound bites: Eurozone economic confidence remains under water at -23.6 in February

Eurozone consumer confidence remains the weakest link in the recovery cycle. Burdened down by extreme fiscal austerity, heavily squeezed real incomes, severe debt deflation, and rising unemployment, it is no surprise that Eurozone consumer confidence is on the ropes and domestic demand is reeling so badly. Recovery in the Eurozone consumer sector will be key for sustainable recovery going forwards, but there seems little chance of that in the near future until Eurozone austerity and the climate of economic fear end. The Eurozone recession looks set to persist for a long while, adding pressure on the ECB to lighten monetary conditions even further. Eurozone rates need to go lower, more monetary expansion is required and the euro needs to be eased lower. The ECB should be taking leafs out of the Fed and BOE’s policy books.