European Indexes Close Down 3%, May Inflation at Record High 8.1%

Bridgette Randall
17 Jun, 2022
New York City

European markets advanced and crude oil prices stabilized as investors shook off worries of rising rates and elevated inflation. 

Market indexes advanced after crude oil prices stabilized above $115 a barrel and European natural gas prices declined 1.4% to $122.34 a unit. 

Stocks opened higher but lacked direction and continued to trade in a tight range and positive bias after the Chinese cabinet vowed to support economic recovery through several measures. 

Investors also took in strides the latest moves by the central banks in the UK. and Switzerland. 

The DAX index gained 1.1% to 13,104.29, the CAC-40 index advanced 0.5% to 5,917.74, and the FTSE 100 index rose 0.5% to 7,078.28.

For the week, the DAX index declined 2.98%, the CAC-40 fell 2.47%, and the FTSE 100 index eased 3.3%.  

Euro zone inflation rose to a record high of 8.1% in May on an annual basis, according to the final data released by the eurostat today. 

The Swiss National Bank raised its key lending rate by 50 basis points to -0.25% and revised higher its inflation outlook for the year on Wednesday. 

In 2022, the Swiss economy is estimated to grow at 2.5% and inflation at 2.8% before cooling down to 1.9% in 2023 and 1.6% in 2024. 

The SNB noted in a statement that the unemployment is likely to remain low and  "mortgage lending and residential property prices have risen further in recent quarters. 

The SNB will continue to monitor developments on the mortgage and real estate markets closely." 

On Thursday, the Bank of England lifted its key lending rate by 25 basis points to 1.25% and said inflation is likely to reach above 11% in the next few months. 

The central bank noted that not all inflation is driven by the war in Ukraine and supply chain disruptions but pricing strategies of goods and services providers are also playing a role. 

Banco Santander SA gained 2.7% to 2.71 euros after the Spanish bank appointed H