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Summing up, the Euro Area ESI (Economic Sentiment Indicator) and Portuguese data, improved in June, the second month in a row, mainly Services and Consumer confidence in EU and Consumer Confidence in Portugal, as industry remains in the doldrums. The profile remains the same, as industry is on the weak side, nevertheless, the dollar strength, could improve industry prospects, in the coming months.        

The European Commission has just released June’s monthly surveys, Euro Area (EA) and countries, namely Portugal.

The main highlights are the following:

1 – May Euro Area Economic Sentiment Indicator (ESI), +130bpMoM to 95.0 (+0.5% YoY) vs. 12MMA (12 month moving average) 96.2 and 3MMA: 94.0;      

2 – Concerning the sub-components, Consumer Confidence improved +130bpMoM, to -17.7 (12MMA: -14.8/3MMA: -19.1) and Services, +60bpMoM to +3.2 (12MMA: 4.1/3MMA: 2.5), while Industry remains under pressure;   

3 – The Portuguese ESI also improved, +130pbMoM to 103.0 (-2.8%YoY), compares with 12MMA: 103.8/3MMA: 101.7;

4 – Regarding the subcomponents in Portugal, it was mainly Consumer Confidence that improved strongly, +430bpMoM to -21.9 (12MMA: -18.9/3MMA: -25.6) as Services and Industry slightly improved;

5 – Separately, the Polish ESI was also released, +30bp MoM to 100.6 (+1.2%YoY). It compares with 12MMA: 99.7/3MMA: 100.1.

Our comments: The Euro Area ESI and Portuguese ESI improved in June, the second month in a row, mainly Consumer Confidence and Services in the EA and Consumer Confidence in Portugal, usually the most volatile subcomponents. Meanwhile, Industry remains under pressure.

All in all, the Iran war negative impact is coming down, which should be seen as positive, even that the profile remains poor as industry is not improving, dollar strength should be positive to industry.

Source: Bank of Portugal, European Commission, AS Independent Research