European Markets Drop 2%, French Inflation Accelerates to Record High

Bridgette Randall
30 Jun, 2022
New York City

Market indexes across Europe faced selling pressure after French inflation rose at the fastest pace since the euro introduction and German jobless rate rose unexpectedly. 

The euro zone unemployment rate fell to a record low 6.6% in May from 6.7% in April and 8.1% a year ago, the eurostat data showed on Thursday. 

The number of unemployed people in the currency zone fell to 11.004 million, a decline of 2.165 million from a year ago. 

Youth unemployment rate declined to 13.1% in May from 13.8% in April. 

The EU 27 jobless rate held at 6.1% in May. 

German retail sales in May increased 0.6% after adjusting for inflation and rose 2.0% in nominal terms from April, the Federal Statistical Office or destatis said on Thursday.

From a year ago, real retail sales declined 3.6% and nominal retail sales rose 4.1% in May. 

June unemployment rate adjusted for seasonal factors in Germany increased to 5.3% from 4.9% in May, Destatis data showed on Thursday. 

Jobless rate a year ago was 5.7%. 

The unemployment rate increased unexpectedly after Ukrainian refugees were counted in people searching for jobs. 

French inflation rate rose at the fastest pace since the euro was introduced in 1999. 

Consumer price inflation rose 5.8% in June after rising at 5.2% in May, according to the latest data released by the French statistics office Insee on Thursday. 

The inflation rate a year ago was 1.5%. 

Harmonized inflation rate in June increased to 6.5% in June from 5.8% in May and 1.9% a year ago, the Insee data showed.  

This week Spain reported inflation surged to 10.2% in June on an annual basis and German inflation in June edged down to 8.2% from 8.7% in May.  

The DAX index dropped 2.5% to 12,674.51, the CAC-40 index declined 2.6% to 5,874.96, and the FTSE 100 index fell 2.2% to 7,152.98. 

The indexes sank more after the release of U.S. inflation data. 

The core personal consumption expenditures price index increased to 4.7% in May, lower than 4.9% in April, the U.S. Commerce Department reported on Thursday. 

The inflation measure declined in May but still elevated near the levels last seen in the 1980s dragged market indexes in New York and in Europe. 

BioNTech SE gained 1.9% to 137.50 euros after the company along with Pfizer Inc were awarded a new vaccine order worth $3.2 billion. 

Uniper SE dropped 117.10% to 13.72 euros after the German Utility withdrew its annual outlook for the fiscal year 2022 citing natural gas restrictions from Russia-based Gazprom. 

Bunzl Plc increased 1.7% to 2,717.0 pence after the U.K.-based business supplies distributor lifted its outlook for the year.  

Saab AB jumped 3.7% to 420.90 Swedish kroner after the defense group won an order of 7.3 billion kroner from the Swedish government.