Sense or sentimentality?

Daily update

UK consumer sentiment improved on the latest reading; but since the financial crisis, sentiment and reality have not been too closely aligned. UK April retail sales were weaker, with a more-than-10% decline in auto fuel sales leading the weakness. UK consumers have options (walking, public transport, flexible working) that can slow fuel consumption when prices rise.
The German ifo business sentiment index is due—this has fallen from its September 2025 peak (manufacturing sales volumes have risen comfortably over the same period). German consumer sentiment was stronger than expected, though this has lagged consumer spending of late. We hear from the ECB’s Lagarde today. There have been signs that the ECB may be looking to commit a policy error (raise rates) this summer.
The US final Michigan consumer sentiment data is of direct value. The most interesting point is any shifts in political sentiment. Republican sentiment has weakened, but is still above where it was under US President Biden. With the affordability crisis persisting, further weakness in (specifically) Republican sentiment may influence policy.
Investors have little more than sentiment when assessing risks around the Iran war. Trying to assess Iran’s position using little more than semi-official news statements and viral Lego-style videos does not create precise analysis.