European Markets Rebounded After German Business Confidence Improved, Labor Markets Stable

Bridgette Randall
19 Dec, 2022
Frankfurt

Benchmark indexes in Europe gained following a brutal market selloff in the previous week after the European Central Bank lifted ley rates and signaled more rate hikes in 2023. 

Market indexes rebounded after the German business confidence index advanced for the third week in a row. 

Germany's Ifo Business Climate Index in December increased to 88.6 from the revised 86.4 in November.  

Moreover, market sentiment was bolstered after policymakers in China pledged to relax and improve coronavirus controls and consider additional support for the property market. 

The DX index advanced 0.4% to 13,942.87, the CAC-40 index rose 0.3% to 6,473.29 and the FTSE 100 index added 0.4% to 7,361.31. 

 

Labor Market Slack Remained Stable

The employment rate in the European Union was stable in the third quarter at 74.7% compared to the second quarter, according to the data released today by Eurostat. 

The labor market slack also remained stable at 11.5% of the extended labor force aged between 20 and 64 years, the statistical office also noted today. 

 

Euro Area Wage Growth Slows to one-Year Low 

Wages and salaries in the Euro Area rose at the slowest pace in a year of 2.1% in the third quarter, Eurostat reported Monday. 

The second quarter wage growth was downwardly revised to 3.2% from the preliminary estimate. 

The non-wage component of total wage and salaries rose 5.3% in the third quarter from a year ago. 

Wages rose for the fifth quarter in a row but at the slowest pace since the second quarter 2021. 

Among large economies in the region, wages rose at the fastest pace in the third quarter among large economies in the region in France at 4.4% followed by 2.5% in Spain and 1.9% in Italy.

However in the European Union, wages rose the fastest in Hungary 16.6 % and Bulgaria 16.3 %. 

Four more EU Member States recorded an increase above 10 %: Lithuania (13.9%), Poland (13.3%), Greece (11.6%) and Romania (10.9%).

While wages in Germany declined 1.5% after rising 3% in the second quarter. 

 

Natural Gas Price Eases, EU Approves Price Cap 

Oil prices advanced after Chinese policymakers vowed to boost consumption at a key meeting on Monday, lifting hopes of higher demand for energy from the second largest economy. 

Moreover, U.S. President Biden's administration is also looking to replenish crude oil reserves starting with 3 million barrels. 

After a year of unprecedented oil depletion, the U.S. government is looking to rebuild its oil 

The U.S. has been depleting the reserve to fight high energy prices for about a year and the White House had estimated to release in total 180 barrels of oil. 

Brent crude oil increased $1.05 to $80.04 a barrel and Dutch TTF natural gas inched fell 6% to