Euro Are Wholesale Inflation Eased, German Exports Rebounded In January

Bridgette Randall
03 Mar, 2023
Frankfurt

Market indexes in Europe digested fresh economic data in the region and welcomed dovish comments from the U.S. Fed policymaker. 

Market indexes rebounded on Friday after Atlanta Fed President Raphael Bostic supported a smaller rate hike of 25 basis points after a day ago Fed Governor Christopher J. Waller supported 50 basis points rate increase if inflation fails to cool in comments to a group of bankers. 

The Euro Area producer price inflation eased in January after energy prices fell, Germany's exports rebounded in January on higher shipments to the U.S., France's industrial output declined for the first time in three months and Italy's GDP contracted marginally in the final quarter of 2022. 

 

Eurozone Wholesale Inflation Eased 

The Euro Area producer price inflation eased to 15.0% in January from 24.5% in December, data from Eurostat showed on Friday. 

 

Germany's Trade Surplus Expanded 

Germany's exports increased 2.1% in January after falling 6.3% in December, the Federal Statistical Office or Destatis reported on Friday. 

The decline in imports eased to 3.4% in January from 5.6% in December, resulting in an increase in trade surplus to Є16.7 billion from Є10.0 billion in the corresponding period.   

 

Italy's GDP Contracted In December Quarter 

Italy's economy contracted 0.1% in the final quarter 2022, reversing the revised 0.4% increase on a monthly basis, the statistical office ISTAT reported Friday. 

Consumer spending fell 1.6% but government spending rose 0.5% in the final quarter on a monthly basis. 

The final estimate of the GDP growth was inline with the preliminary estimate released on January 31.  

The GDP growth on an annual basis was revised to 1.4% increase from the previous estimate of 1.7% and slower from 2.5% increase in the third quarter ending in September. 

 

Indexes & Yields 

The DAX index increased 1.5% to 15,555.83, the CAC-40 index added 0.9% to 7,347.96 and the FTSE 100 index decreased 3.3 points to 7,347.96. 

The yield on 10-year German bunds inched lower to 2.72%, French bonds fell to 3.21%, UK gilts to 3.85% and Italian bonds to 4.56%. 

The euro edged lower to $1.06, the British pound eased to $1.19 and the Swiss franc to 93.86 cents. 

Brent crude oil added 5 cents to $84.81 a barrel and the Dutch natural gas futures fell Є1.34 to Є45.48 a MWh. 

 

Europe Movers 

Deutsche Lufthansa AG increased 6.4% to €10.49 after the German airline swung to a full-year operating profit and the airline forecasted additional improvement in 2023. 

Revenue in the financial year 2022 nearly doubled to €32.8 billion from €16.8 billion and net income improved to a profit of €791 million from a loss of €2.2 billion in the previous year. 

In total, the German airline transported 102 million passengers in 2022 compared to 47 million in the previous year. 

The seat load factor improved to 79.8% in 2022, 18.2 percentage points higher than 61.6% in the previous year. 

Lufthansa cargo revenue increased 21% from the previous year and jumped 136% from the pre-covid 2019 level to a record high after yield improved in all traffic regions. 

Schaeffler AG increased 1.1% to €7.09 after the German industrial products and bearings maker announced an acquisition. 

The company agreed to acquire 100% stake in Paris-based predictive maintenance solution provider Eco-Adapt SAS and the acquisition is expected to close int he first-half of 2023. 

Pearson Plc declined 3.2% to 891 pence after the UK-based test preparatory and higher education books publisher forecasted 2023 revenue growth in "low- to mid-single digit."

Revenue in the full-year 2022 increased 12% to £3,8 billion from £3.4 billion and  operating profit increased to £271 million from £183 million and diluted earnings per share £332.6mincreased to 32,8 pence from 23.5 pence in the previous year. 

Rightmove Plc declined 1.1% to 557.40 pence despite the company reporting an increase in operating profit and raising its final dividend payment. 

The largest online property platform operator in the UK increased its final dividend to 5.2 pence from 4.8 pence and total dividend to 8.5 pence from 4.8 pence a year ago. 

Revenue in the full-year 2022 increased 9% to  £332.6 million from £304.9 million and operating profit from continuing operations increased 6% to £245.4 million from £231.0 million. 

Total agent membership was flat in 2022 at 19,014 compared to 18,969 in 2021.