European Indexes Lower, German Inflation Rises

Arthi Gupta
20 Jul, 2010
New York City

The European markets extended their fifth consecutive session of losses after Goldman Sachs reported quarterly earnings dropped 82%. The Bank of France Governor Christian Noyer urges EU members for drastic budget deficit cuts. German PPI rises in June. Spain completed

[R]4:00 PM Frankfurt – The European markets extended their fifth consecutive session of losses after Goldman Sachs reported quarterly earnings dropped 82%. The Bank of France Governor Christian Noyer urges EU members for drastic budget deficit cuts. German PPI rises in June. Spain completed €5.97 billion Treasury bills.[/R]

U.S. and European stocks fell on disappointing earnings data from Goldman Sachs and Asian stocks rose amidst optimism that China may relax policy tightening measures.

Italy non-EU trade deficit narrows in June. Italian industrial new order growth eases in May. Swiss trade surplus fell in the first half of 2010 and Spanish exports soar in May.

In Paris CAC 40 Index decreased 42.99 or 1.23% to close at 3,443.34 and in Frankfurt DAX Index edged lower 61.74 or 1.02% to close at 5,949.00.

The Bank of France Governor Christian Noyer said on Monday that European governments must focus on cutting their budget deficits to restore confidence.

Noyer, who is also a member of the European Central Bank Governing Council, wrote in the introduction letter of the French central bank''s annual report that deficits, far from protecting the growth, threaten and compromise it because they undermine growth. He said re-balancing public finances is to restore confidence and thus creating current and future conditions favorable for strong growth. Further, he said the French economic recovery remains fragile.

German producer price inflation rose further in June from May. The producer price index rose 1.7% year-on-year in June compared to a 0.9% growth in May, according to a report released by the Federal Statistics Office today. Producer prices increased for the third successive month.

On a monthly basis, the PPI rose 0.6% in June versus a 0.3% growth in May. The monthly producer price inflation rose for the fifth straight month.

Excluding energy, producer prices increased 2.1% on an annual basis in June and edged higher 0.3% compared to the preceding month.

Italy''s non-EU trade deficit narrowed in June from the previous month. Italy''s trade deficit with non-EU countries narrowed to €1.06 billion in June from €1.42 billion in the previous month, according to a preliminary report by the statistics office Istat released today. A year ago, the trade surplus amounted to €77 million.

On a seasonally adjusted basis, exports increased 9.2% month-on-month in June, accelerating from 1.4% rise in May.

Italian industrial new order growth slackened in May following a sharp rise in April, while industrial turnover growth picked up after slowing in the previous month.

New orders to Italian industries rose 3.2% month-on-month in May from a revised 4.8% growth in April, according to figures released by the statistics office Istat today. The new order growth accelerated to 26.6% in May from 20.6% in April on an annual basis.

Switzerland’s trade surplus declined to Sfr9.9 billion in the first half of 2010 from Sfr11.56 billion in the second half of 2009, according to reports released by the Federal Customs Administration today.

The Federation of the Swiss Watch Industry FH reported growth in watch exports exceeded 30% for the second time this year in June. The value of watch exports in June was Sfr1.4 billion, an increase of 35% compared to last year.

Spanish exports growth increased in May compared to the previous month, according to official data released today.

Exports rose 25.7% year-on-year in May from a 10.8% rise in April, according to data released from the Ministry of Industry, Tourism and Commerce today. The value of exports was €16.21 billion and imports were €20.38 billion during May, representing a 26.1% rise annually.

Spain sold €5.97 billion Treasury bills today. Spain''s 12-month bills were sold at a 2.221% yield, smaller than the 2.303% at the previous sale on June 15. The Treasury also sold 18-month bills at 2.331% compared to 2.837% in June.

Spain has the third largest deficit in the euro area with a budget deficit of around 11.2% of GDP.