In July, French consumer confidence rose to 89, and savings intentions hit a record high.
by VT Markets
/
Jul 25, 2025
In July 2025, French consumer confidence rose to 89, slightly above the expected 88, according to INSEE data. However, this figure is still below the long-term average of 100.
Households are showing increased intentions to save, reaching a historic high first seen in February 2025. Additionally, worries about unemployment have eased somewhat.
Analysis Of Consumer Confidence
The small increase in consumer confidence is less significant than it seems. The main concern is that French household confidence remains low, which can hinder economic growth. We should remain cautious in the upcoming weeks.
The high savings intentions are the most important takeaway. This suggests people are postponing spending, which is supported by recent Eurostat data showing that the French household savings rate is around 17%. We recommend considering put options on consumer discretionary stocks, particularly in the luxury sector.
The decrease in unemployment worries adds some complexity to the situation, so we can’t be entirely negative. The mix of low consumer confidence and a slightly improved job outlook creates uncertainty, often leading to higher option premiums. We can take advantage of this by exploring strategies that sell volatility, especially since the CAC 40 index might face challenges in finding clear direction after its recent performance.
Economic Sentiment And Market Implications
This situation resembles the aftermath of the 2011 sovereign debt crisis, when confidence remained low for a long time despite policy efforts. During that period, markets experienced extended periods of stagnation before a clear trend developed. History tells us that any recovery in spending is likely to be gradual rather than sudden.
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by VT Markets
Jul 25, 2025
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