European Markets Advance After ECB Emergency Meeting to Fight Widening Bond Yields

Bridgette Randall
15 Jun, 2022
New York City

European markets advanced after the European Central Bank announced a plan to tame diverging bond yields. 

The DAX index jumped 1.4% to 13,485.29, the CAC-40 index gained 1.4% to 6,030.13, and the FTSE index increased 1.2% to 7,273.41. 

The European Central Bank said it plans to release a new tool to tackle rising sovereign bond yields and the risk of euro zone fragmentation. 

The yield on 10-year German Bund trade around 1.60% but the yields on similar maturities of Italian bonds surged above 4% and of Greek bonds hovered near 7%. 

The central bank plans to reinvest redemptions from the proceeds of its emergency bond purchasing program in a flexible way. 

The central bank set no limit for the purchase amount. 

Banks gained after the central bank announced its plan. 

Italian banks Unicredit, Intesa Sanpaolo and BPER Banca gained between 3% and 5% after the ECB announcement. 

Eurozone industrial production rebounded in April but the pace of growth remained weak, Eurostat reported on Wednesday.

On a monthly basis, industrial output increased 0.4% in April, reversing a revised 1.4% decline in March. 

Industrial production was initially estimated to decline 1.8% in March.  

The final inflation data in France matched the previous estimate as inflation continued to accelerate in the country on the continent. 

The consumer price index rose 5.2% in May, faster than the 4.8% increase in April from a year ago.  

The rate matched the flash data published on May 31.

On a yearly basis, energy prices soared 27.8% in May due to elevated petroleum product prices and food prices increased 4.3% in May and services cost rose 3.2% from a year ago. 

Bulgaria's inflation rose the most in 24 years according to the latest data from the National Statistical Institute. 

Consumer prices accelerated 15.6% in May following a 14.4% rise in April on an annual basis. 

The latest inflation surpassed the previous record of 18.8% in May 1998.

Transport costs soared 32.6% yearly in May and prices food and non-alcoholic beverages advanced 22.7%.

H&M Hennes & Mauritz AB dropped 6.5% to 124.51 krona despite the apparel retailer reported sales increased 12% in local currencies in the latest quarter ending in May.

Sales increased  17% in Swedish krona.

 Bloomsbury Plc increased 1.6% to 386 pence after the publishing company reported record sales and earnings and said "reading has become a reacquired habit and continues to thrive."

Sales surged 24% to