German Inflation Held Steady but Elevated, Swiss Retail Sales Dropped

Bridgette Randall
01 Mar, 2023
Frankfurt

European market indexes opened higher on China optimism but major averages in the region eased in the final hour of trading and closed down.  

Stocks opened higher after China's official measure of manufacturing activities expanded at the fastest rate in eleven years and service sector activities also rose at a robust pace. 

Upbeat China data failed to overcome ongoing investor worries about economic slowdown and aggressive rate hikes. 

Economic news in the region showed cooling of inflation is likely to take longer than previously expected and labor market conditions remained tight. 

Germany's consumer price inflation held steady at 8.7% but elevated in February, said the Federal Statistical Office.  Jobless rate was stable at 5.5% in the month despite challenging market conditions, said the Federal Labor Agency. 

Swiss retail sales declined for the fourth month in a row in January. 

Norway's current account jumped to NOK 361.20 billion in the fourth quarter of 2022 from NOK 230.84 billion from the previous year. 

Surplus of goods and services accounts increased to NOK 324.65 billion from NOK 266.66 billion a year ago. 

 

Germany's Consumer Price Inflation Held Steady 

Consumer price inflation in Germany held steady in February, the Federal Statistical Office or Destatis said in a preliminary report on Wednesday. 

Consumer price index rose 8.7% in the month matching the increase in January despite the sharp fall in energy prices. 

Energy prices rose at a slower pace of 19.1% in February from 23.1% rise in January but food price inflation accelerated to 21.8% from 20.2% in January.  

Energy prices rose at a double digit pace despite the government's relief package for consumers. 

On a monthly basis, consumer prices rose 0.8%. 

 

Swiss Retail Sales Extended Decline to Fourth Month

Swiss retail sales declined for the fourth month in a row in January, the Federal Statistical Office reported Thursday. 

Sales declined 2.2% in January after falling at a rate of 3.0% in December on an annual basis after food and non-food items sales dropped. 

Sales of food, tobacco and beverages declined 3.3% and non-food items sales dropped 2.3%, the statistical office reported.   

On a monthly basis, retail sales rose a seasonally adjusted 0.6% and In nominal terms, retail sales advanced 0.7% annually and 1.2% from the previous month in January.

 

Indexes & Yields 

The DAX index declined 0.4% to 15,305.02, the CAC-40 index dropped 0.5% to 7,234.25 and the FTSE 100 index rose 0.5% to 7,914.93. 

The yield on 10-year German Bunds increased to 2.72%, French bonds rose to 3.21%, UK gilts to 3.82% and Italian bonds to 4.57%. 

The euro increased to $1.066, the British pound inched lower to $1.205 and the Swiss franc to 94.00 cents. 

Brent crude oil increased 91 cents to $84.36 a barrel and natural gas rose 40 cents to $47.08 per MWh. 

 

Europe Movers  

Resource stocks in London and across Europe and luxury fashion goods makers traded higher on China optimism. Brent crude oil and copper and iron ore prices rose as well.  

BP Plc and Shell Plc increased 1% and mining companies Antofagasta, Glencore and Anglo American advanced between 3% and 5%. 

LVMH and Kering SA added between 1% and 2% on the hopes of higher sales in China. 

Persimmon Plc dropped 9.7% to 1,310.81 pence after the UK homebuilder reported a fall in pre-tax earnings and estimated lower home completions in 2023. 

Euronext NV increased 4.0% to €71.92 after the pan-European bourse offering various trading services withdrew its offer to acquire Allfunds Group Plc. 

Allfunds declined 13.2% to €7.19. 

PUMA SE declined 6.8% to €56.30 after the German sportswear maker warned cost pressures are likely to persist in 2023. 

Fourth quarter sales increased 24.3% to  €2.2 billion but net income plunged to €1 million from €8 million in the previous year. 

Full-year 2022 revenue increased 24.4% to €8.4 billion and net income improved to  €354 million from € 310 million a year ago. 

Earnings per share in the full-year 2022 increased to €2.36 from €2.07 in 2021.