Spain and Italy Report Large Trade Deficits, European Markets Advanced

Bridgette Randall
16 Feb, 2023
Frankfurt

European markets traded higher despite the inflation headwinds and investors reacted to domestic earnings. 

Positive earnings in France, UK and Germany reiterated the Euro Area region's economic strength and investors overlooked the U.S. inflation worries. 

The producer price index, a measure of wholesale prices, in the U.S. rose more than expected in January, the U.S. Bureau of Labor Statistics said Thursday. 

 The Producer Price Index for final demand increased 0.7% in January from the previous month and advanced 6.0% in a year, the most in seven months. 

Prices for final demand goods advanced 1.2%, and index for final demand services rose 0.4%.

 

Italy's Trade Balance In Surplus In December, Deficit In 2022  

Italy's international trade balance swung to a surplus in December reversing the deficit in the month a year ago. 

Trade balance swung to Є1.1 billion in December from Є1.5 billion in the month a year ago and declined from a surplus of Є1.4 billion in November, the data from Italian Statistics Office Istat showed Thursday. 

In the year 2022, exports increased 19.9% (19.7% for EU countries and 20.2% for non-EU countries) and imports increased 36.5% (22.8% for EU countries and 54.4% for non-EU countries).

In the year 2022, the trade balance registered a deficit of Є31,0 billion compared to the surplus of Є40.3 billion the year earlier. 

Excluding energy, the surplus was Є80.3 billion compared to Є88.7 billion in 2021.

 

Spain's Inflation Accelerated In January 

Spain's inflation accelerated in January in the final estimate released by the statistics Office INE Wednesday. 

Consumer price index increase was revised higher to 5.9% from the previous estimate of 5.8% and faster than 5.7% in December. 

 

Higher Energy Prices Expands Spain's Trade Deficit In 2022 

Spain's foreign trade deficit rose in December from November but fell from the corresponding month a year ago, the Economy Ministry data showed Thursday.  

Trade deficit in December to Є4.51 billion from Є5.34 billion a year ago but rose from Є3.3 billion in November.  

In 2022, total trade deficit surged to Є68.1 billion, sharply higher from Є26.2 billion in 2021. 

Exports rose 22.9% and imports surged 33.4% in the full-year 2022. 

 

European Markets 

The DAX index index increased 0.2% to 15,533.64, the CAC-40 index rose 0.9% to 7,366.16 and the FTSE 100 index advanced 0.2% to 8,012.53. 

The euro edged lower to $1.06, the British pound declined to $1.193 and the Swiss franc eased to 92.56 U.S. cents. 

The yield on 10-year German Bunds increased to 2.49%, French bonds rose to 2.93%, the UK Gilts to 3.50% and Italian bonds to 4.32%. 

Brent crude oil closed down 61 cents to $84.77 a barrel and the Dutch TTF Spot Price fell 5% to Є52.01 per MWh. 

 

Europe Movers 

Orange SA increased 6.2% to €10.62 after the mobile telephone service provider reported better-than-expected financial results. 

Revenue in the fourth quarter increased 1.8% to €11.3 billion and in 2022 rose 2.2% to €43.4 billion. Consolidated net income totaled €2,6 billion from €778 million in 2021.

The company proposed a dividend of 70 euro cents a share and the board of directors will decide on the payment on May 23. 

Kering SA increased 3.7% and extended gains for the second day to €596.70 after the luxury goods company reported higher earnings in 2022.

Commerzbank AG increased 11.6% to €11.50 after the German bank forecasted higher profit in the current year supported by rising rates. 

Net interest income in fiscal year 2022 increased 33% to €6.46 billion and total revenue increased 12.0% to €9.4 billion from €8.5 billion a year ago. 

Net income increased more than three-fold to €1.44 billion from €430 million a year ago.  

The company also estimated net interest income in 2023 to rise above €6.5 billion.

The company said it plans to distribute €250 million or 20 euro cents a share to common shareholders after the annual meeting at the end of May. 

Centrica PLC increased 5% to 103.45 pence after the electric utility services provider reported better-than-anticipated results. 

Revenue in 2022 increased to £23.7 billion from £14.7 billion a year ago. 

The company swung to a loss of £636 million compared to a profit of £1.2 billion a year ago. 

The company proposed a final dividend of 2 pence per share in addition to interim dividend of 1 pence a share.

The company said adjusted earnings increased to £2.0 billion from £162 million or 34.2 pence from 2.80 pence a year ago.