Euro Area Current Account Deficit Narrows; German PPI Rises

Arthi Gupta
20 May, 2011
New York City

The European indexes declined after euro-zone current account deficit narrowed and French leading index rose in March German producer price inflation increased in April. Siemens ordered to pay

[R]2:00 PM Frankfurt – The European indexes declined after euro-zone current account deficit narrowed and French leading index rose in March German producer price inflation increased in April. Siemens ordered to pay €648 million as compensation to Areva.[/R]

U.S. indexes dropped and Asian markets traded lower.

The European Bank for Reconstruction and Development on Friday lifted growth outlook for Eastern Europe and central Asia.

The EBRD raised the region''s economic growth estimate for 2011 to 4.6% from 4.2%. The average growth for next year is seen at 4.4%.

In Paris CAC-40 Index declined 7.87 or 0.20% to 4,019.87 and in Frankfurt DAX index edged lower 40.90 or 0.56% to 7,317.33.

Euro-zone Current Account Deficit Narrows

The euro area current account deficit narrowed in March, data from the European Central Bank showed today.

The current account deficit totaled a seasonally adjusted €4.7 billion in March compared to the €6.5 billion shortfall recorded in February.

For the first quarter, the current account deficit was €16.8 billion on a seasonally adjusted basis.

French Leading Index Rises

French leading economic index increased 0.9% on a monthly basis in March, supported by improvement in industrial new orders, yield spread and production expectations, data from a survey conducted by Conference Board showed on Friday. In February, the indicator grew 0.5%.

German Producer Price Inflation Up

German producer price index for industrial products rose 6.4% annually in April, following a 6.2% gain in March , data released by the Federal Statistics Office showed today.

Energy prices jumped 11.8% in April.

On a monthly basis, producer prices increased 1% in April, after rising 0.4% in March.

Siemens Pays Compensation to Areva

The tribunal of the International Chamber of Commerce has asked Siemens to pay €648 million or about $928 million plus interest to Areva in compensation stating that the German industrial conglomerate had not fully met its contractual obligations towards France''s Areva S.A. when it quit their nuclear joint venture Areva NP S.A.S.

Gainers & Losers

Commerzbank AG climbed 0.90% to $5.60 after the Germany-based bank plans to raise around €5.3 billion through its rights issued that will be announced early next week, the Wall Street Journal reported citing sources.

Siemens AG fell 1.44% to €92.49 after the company engaged in electronics and electrical engineering said that the tribunal of the International Chamber of Commerce asked the industrial conglomerate to pay €648 million plus interest to France''s Areva over its exit from their nuclear joint venture.

Stada Arzneimittel AG gained 1.86% to €29.78 after the Germany-based company active in the pharmaceutical sector resolved to enter into concrete negotiations with Swiss pharmaceuticals company Spirig Pharma AG on the acquisition of Spirig''s generics business in Switzerland.

UBS AG rose 0.87% to $8.62 after the Swiss bank named Thomas Langford as global head of its energy investment banking unit, based in Houston, and reportedly denied speculation that Wells Fargo & Co. may buy its U.S.-based wealth management unit.