European Indexes Turn Lower After Inflation In Spain Reaches a 37-Year High

Bridgette Randall
29 Jun, 2022
New York City

Major averages in Europe were on the decline in cautious trading ahead of comments from the central bank leaders and Spain's inflation surged to a record high. 

investors have been on the defensive after a 3-day rally in crude oil prices stoked fears of another hike in inflation with no end in sight for the war in Ukraine. 

Turkey agreed to let Finland and Sweden join the military alliance NATO, Secretary General Jens Stoltenberg said. 

The expansion of NATO is only going to escalate hostilities with Russia and prolong the war in Ukraine and further fuel energy and food inflation. 

Investors also awaited latest comments from the ECB President Christine Lagarde, the Fed Chairman Jerome Powell, and the Bank of England Governor Andrew Baile at a gathering in Sintra, Portugal. 

However, central banks are powerless in impacting inflation fueled by supply disruptions linked to coronavirus and Ukraine war. 

The Economic Sentiment Indicator dropped in both the EU and the euro zone. 

The ESI declined  in the EU by 1.7 points to 102.5 and in the euro area fell -1.0 point to 104. 

The Employment Expectations Indicator also decreased -1.6 points to 110.6 in the EU and -1.7 points to 110.9 in the euro area. 

Spain's consumer inflation in June soared to 10.2% from 8.7% in May and 2.7% a year ago, the statistical office reported today. 

Spain's inflation was record high in 37 years since 1985. 

 Germany also reported elevated inflation in June, according to the Federal Statistical Office destatis in Wiesbaden, Germany. 

Consumer prices rose 7.6% in June from a year ago and rose 0.1% from May. The CPI in May rose at 7.6% from a year ago. 

The DAX index declined 1.4% to 13,050.33, the CAC-40 index fell 0.81% to 6,037.09, and the FTSE 100 index added 0.04% to 7,327.01. 

The U.K. retail prices rose at the fastest pace since 2008 according to the data released by the British Retail Consortium. 

 The BRC-NielsenIQ shop price index increased 3.1% after rising at 2.8% in May on an annual basis. 

Resource stocks rose after crude oil, natural gas, and base metal prices rose for the third day in a row. 

Antofagasta, Glencore, and Anglo American declined more than 2% despite the rise in commodities prices but worries on the global economic slowdown loomed trading sentiment. 

Essilor Luxottica declined 2.3% to 140.94 euros after Leonardo Del Vecchio, the chairman of the eyeglass retailer and one of the richest business groups in Italy, passed away at the age of 87.  

Shoe Zone, the U.K. based discount retailer, in a trading update said adjusted full-year pre-tax profit is expected to be