Euro Zone Inflation Eases, German Jobless Rate Rises

Bridgette Randall
30 Nov, 2022
Frankfurt

European markets closed higher after inflation eased in the euro zone  and higher closing in Asian markets.

Market sentiment was mildly positive and after the close, U.S. Federal Reserve Chairman said in a speech that future rate hikes may need to be moderated. 

Chairman Powell added that the full impact of the recent rate hikes in interest rates are still to be felt. 

Powell went on to add that it may make sense to moderate future rate increases as rates approach restrictive levels and we have a better understanding of the impact of higher rates on the economy. 

"Monetary policy affects the economy and inflation with uncertain lags, and the full effects of our rapid tightening so far are yet to be felt.

Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.

The time for moderating the pace of rate increases may come as soon as the December meeting," said Chairman Jay Powell in a speech Wednesday.

However, Powell cautioned that rates may have to go higher for a longer period than previously anticipated and stay higher to keep the rates sufficiently restrictive and bring down inflation to the target rate of 2%.

 

Euro Zone Inflation Eases

Consumer price inflation in November declined to 10.0% in the euro zone from a record high 10.6% in October, Eurostat data showed Wednesday.

The headline inflation slowed for the first time since June 2021 and the core rate of inflation excluding food and energy was unchanged at 5.0%. 

Energy price inflation in November, slowed toto 34.9% from 41.5% and food inflation continued to advance. 

Food, alcohol and tobacco price increase accelerated to 13.6% after rising 13.1% a month ago.

 

France's Consumer Inflation Steady

Consumer prices in France increased 6.2% in November, matching the rate in October, the French statistical agency INSEE reported Wednesday. 

Energy price inflation slowed to 18.5% from 19.1% and food price inflation increased to 12.2% from 12.0%. 

 

German Jobless Rate Rises 

Jobless rate rose to 5.6% in November from 5.5% in October, the Federal Labor Agency reported Wednesday. 

The number of unemployed increased by 17,000 in November, following 9,000 in October. 

A separate survey released by the German statistical office showed the seasonally adjusted jobless rate held steady at 3.0% in October. 

The number of unemployed decreased by 1,700 to 1,33 million.  

 

Natural Gas Prices Surge Again

European natural gas prices soared 10% as storage dipped in several countries and temperatures dipped and Norway and the UK face difficulties at gas terminals.

Brent crude oil increased $2.54 to $89.52 a barrel and Dutch TTF natural gas price soared 10.7% to 146.40 MWh. 

 

Europe Market Indexes 

The DAX index increased 0.3% to 14,397.04, the CAC-40 index advanced 1.04% to 6,738.55 and the FTSE 100 index gained 0.8% to 7,573.05. 

The yield on 10-year German Bunds decreased to 1.89%, French bonds eased to 2.40%, the U.K. Gilt to 3.16% and Italian bonds to 3.87%. 

The euro edged up to $1.04 and the British pound to $1.20. 

 

Europe Stock Movers 

AstraZeneca increased 1.2% to 11,194.0 after the pharmaceutical company said it sold its manufacturing site located in Wester Chester, Ohio to National Resilience, Inc.. 

Pennon Group dropped as much as 5% but managed to close down 0.5% to  934.74 after the waste and waste water management company reported first-half pre-tax profit declined. 

SEGRO Plc declined 1.1% to 799.32 pence after the property investment and development company launched a unsecured 19-year bond offering for 350 million pounds. 

BioNTech SE increased 1.1% to