Euro Area Retail Sales Eased, UK Vehicle Registrations Approached Pre-pandemic Level

Bridgette Randall
06 Mar, 2023
Frankfurt

European market indexes advanced and investors looked ahead to a busy week of economic reports and a fresh batch of corporate earnings. 

Energy explorers and resource stocks closed lower following the weakness in crude oil and natural gas prices after China lowered its economic growth target in 2023. 

European indexes are expected to trade volatile as investors look ahead to India's money supply growth, foreign exchange reserves and industrial production data, U.S. jobs market and the Euro Area GDP data later in the week.

Investors will also review comments from the U.S. Federal Reserve and the European Central Bank policy makers during the week. 

 

Euro Area Retail Sales Eased 

On the economic front, the Euro Area retail sales rose less than expected in January, Eurostat reported on Monday. 

Retail sales in January rose 0.3% after falling 1.7% in December on a monthly basis. 

On an annual basis, retail sales decline eased to 2.3% at the start of the year after falling 2.8% in December. 

The weaker-than-expected retail sales suggested that consumers are still struggling under the high prices of food and energy. 

Food, drinks and tobacco sales rose 1.8% after a 2.1% decline and non-food product sales rose 0.8% after falling 2.5%. 

Automotive fuel sales fell 1.5% reversing a 0.5% increase in the prior month.

UK new car registration increased for the seventh month in a row on the sustained demand for electric vehicles, the Society of Motor Manufacturers and Traders reported Monday. 

Passenger vehicle sales increased 26.2% in February from 14.7% rise in January and new car registration increased to 74,441 units from 58,994 a year ago. 

The 7-month sustained rebound in vehicle sales lifted automobile registration and approached the pre-pandemic 2020 registration in the corresponding month.  

Vehicle registrations were only 6.5% lower than February 2020.

 

China Sets Modest Economic Growth Target In 2023 

China lowered its economic growth target in 2023 to 5% after missing the 5.5% in the previous year. 

China's economy expanded at 3.3% in 2022 and is likely to advance at a slower pace on the weak export growth and falling property prices.  

Outgoing Premier Li Keqiang announced the target rate at the annual legislative conference on Sunday and the party officials focused on reviving growth through other measures. 

 

Indexes & Yields 

The DAX index increased 0.2% to 15,615.14, the CAC-40 index added 0.1% to 7,358.28 and the FTSE 100 index decreased 0.6% to 7,901.03. 

The yield on the 10-year German Bunds edged lower to 2.66%, French bonds eased to 3.2%, the UK gilts to 3.8% and Italian bonds to 4.4%. 

The euro inched higher to $1.06, the British pound edged higher to $1.20 and the Swiss franc to 93.48 U.S. cents. 

Brent crude oil decreased $1.05 to $84.77 a barrel and the Dutch TTF natural gas futures dropped Є2.14 to Є42.85 per MWh. 

 

Europe Movers 

Telecom Italia SpA increased 3% to €0.32 after Italian state investor CDP and Australia's private equity and asset management group Macquarie submitted a joint bid to acquire the company's fixed-network business. 

Eni SpA added 0.7% to €13.52 after the Italian company struck a deal with Abu Dhabi National Oil Company in deepening their ties in reducing emissions and producing clean energy. 

Clarkson PLC increased 5.5% to 3,485.0 pence after the U.K.-based shipping services provider reported a rise in 2022 earnings. 

Resource stocks traded lower after Brent crude declined 1.1% and natural gas dropped 4.8% and base metal prices fell around 1%.  

Glencore, Antofagasta and Anglo American declined between 1% and 3%. 

James Fisher & Sons plc declined 4.6% to  372.50 pence after the U.K.-based company agreed to sell its nuclear decommissioning business for nominal consideration and established a new intercompany credit agreement.