European Indexes Rest, French Industrial Output Rises, Inflation Lifts British Retail Sales

Bridgette Randall
10 Jan, 2023
Frankfurt

European markets traded lower from the recent 7-month highs and investors weighed the possibilities of a soft-landing scenario in the event of continual decline in inflation driven by the fall in energy prices. 

Market indexes were under pressure after two officials at the U.S. Federal Reserve supported the rates to rise above 5% in public comments.

Moreover, Fed chairman Jerome Powell delivered his comments at a gathering organized by the Sverige Riksbank in Stockholm, Sweden. 

Powell stressed the independence of the central bank and added that the Federal Reserve is not interested in pursuing any social goals including climate change and limit its focus to keeping prices stable and creating maximum employment. 

Social goals are best handled by politicians who are empowered by the election results and the central bank's mandate is to focus on keeping inflation in its target range and maximize employment, chairman Powell added.

 

French Industrial Output Advanced In November 

France's industrial production increased 2.0% in November, faster-than-expected pace after workers returned from strike, according to data released by the statistical agency INSEE. 

Industrial output increased 2.0% from October when it fell by a revised 2.5% and manufacturing output, a component of total output, increased 2.4% from 2.1% decrease a month ago.

Mining production decline moderated to 0.6% in November after falling sharply at 5.3% in October.  

Refined petroleum and coke production shot up 90.6% after normal production activity resumed following the end of the strike. 

 

Higher Prices Lift British Retail Sales In December

Retail sales in December rose according to the survey released by the British Retail Consortium and accounting firm KPMG.

Comparable December retail sales rose 6.9% compared to 4.2% in November driven by higher prices but unit volumes declined. 

Consumers are battling 4-decade high inflation and are limiting their purchases to essential items.

Prices for food items edged slightly lower to 14.4% in December from 14.6% in November.  

 

European Indexes Edge Lower 

The DAX index fell 0.1% to 14,774.60, the CAC-40 index declined 0.6% to 6,869.14 and the FTSE 100 index decreased 0.4% to 7,694.49. 

The yield on 10-year German Bunds rose to 2.284%,French bonds increased to 2.788%, UK Gilts to 3.58% and Italian bonds to 4.20%. 

Brent crude oil futures contract for immediate month delivery increased 28 cents to $79.95 a barrel and the Dutch TTF natural gas fell 7.9% to