(April 24 – 15:00 ET) – Markets rallied on the heels of today’s releases of lower-than-expected U.S. Consumer Confidence numbers. BMO Nesbitt Burns Inc. confirms the market’s view, saying the result should bring renewed cuts to interest rates in the United States.

Consumer confidence plunged to 109.2 in April from 116.9 in March, returning to lows seen in February. BMO Nesbitt Burns says, “The latest figures were much weaker than market expectations, with big declines in both the expectations and current situation components. The only ray of sunlight is that the survey was largely completed before the Fed’s latest rate cut and the recent equity-market snapback.”

Although U.S. retail sales have so far weathered the downturn rather well, BMO Nesbitt Burns says that with jobs and confidence both declining, “a test lies ahead”. Consumer optimism about the job market plunged, as did home buying intentions.

“The confidence measures are decent leading indicators that warn us not to become complacent about sustained retail spending growth. The Fed, taking note, will still be on track for another 50 basis point rate cut in May.”