European Jobless Rate Revised to 12.2%, UK Banks Urged to Lift Capital Ratio

Nigel Thomas
02 Jul, 2013
New York City

European markets traded lower and jobless rate in the euro zone was revised higher to 12.2% a day after the scheduled release of data. Bank of England urged banks to lift capital reserve ratio earlier than five year time-table set by Basel committee.

[R]3:30 PM Frankfurt – European markets traded lower and jobless rate in the euro zone was revised higher to 12.2% a day after the scheduled release of data. Bank of England urged banks to lift capital reserve ratio earlier than five year time-table set by Basel committee.[/R]

European markets traded lower and construction industry expanded at a slower than expected pace in June.

In London, FTSE 100 index was nearly unchanged and in Frankfurt the DAX index decreased 0.6%. In Paris, the CAC 40 index decreased 0.4%.

The UK construction sector activity expanded for the second month in a row from a year ago, a private survey conducted by Markit Economics and Chartered Institute of Purchasing & Supply in London showed today.

In a separate report, British Chamber of Commerce said in its latest Quarterly Economic Survey noted progress in the UK economy and said recovery is gathering momentum. The survey noted an improvement in most broad economic indicators but also cautioned headwinds ahead both from domestic sectors and international economies.

Eurostat, the statistics agency in the euro zone revised the jobless rate in the currency zone after it corrected French data.

After the revision, the unemployment rate in May was revised to 12.2% from 12.1% reported a day ago and French jobless rate was lifted up by 0.5 percentage point.

The youth unemployment rate in May was revised higher to 23.9% from 23.8% and jobless rate in the wider block of 27 nations was estimated at 11%, unchanged from April.

Stocks in Review

Fresenius Medical Care plunged 8.5% in Frankfurt trading after the U.S. government agency proposed to lower payment for kidney dialysis centers as early as next year. The company relies for 10% of its revenue from the government run Medicare program.

Utilities companies in Frankfurt declined after Morgan Stanley lowered its view on two largest utilities in Germany.

RWE declined 4% and E.ON fell 3%.

Insurance companies declined in Frankfurt trading after JP Morgan lowered its view on the sector.

Munich Re fell 2.3% and Hannover Rueckversicherung declined 2.4%. Swiss Re fell 1.8%.

Erste Group Bank AG decreased 2.5% after Austria’s largest lender placed 661 million euros of new shares to repay government aid and cut holdings of key shareholders.

In Paris trading, Michelin gained 2.8% after UBS lifted its view on the tire maker and cited higher global sales.