Michigan Consumer Sentiment Rises To 71.8, Missing Analyst Expectations

The University of Michigan commented: “Consumer sentiment was little changed this month, inching up 1.3 index points from October. In November, sentiment extended a four-month stretch of consecutive incremental increases.”

Current Economic Conditions decreased from 64.9 in October to 63.9 in November, while Index of Consumer Expectations increased from 74.1 to 76.9. According to the report, the Expectations index surged for Republicans and fell for Democrats as they reacted to the results of presidential elections.

Year-ahead inflation expectations declined from 2.7% in October to 2.6% in November. Year-ahead inflation expectations are at their lowest level since December 2020. In the two years prior to the pandemic, year-ahead inflation expectations ranged between 2.3% and 3.0%.

Long-run inflation expectations increased from 3.0% in October to 3.2% in November. The report showed that uncertainty over long-run inflation has also increased. The increase in the long-run inflation expectations mirrors the recent moves in the Treasury markets. The yield of 10-year Treasuries increased from 3.70% in early October to 4.42%, while the yield of 30-year Treasuries grew from 4.05% to 4.60%.

U.S. Dollar Index moved away from session highs as traders reacted to the Michigan Consumer Sentiment report. Currently, U.S. Dollar Index is trying to settle below the 107.50 level.

Gold tested the $2700 level as traders remained focused on geopolitical tensions.