European Markets Extended Weekly Losses, German Inflation Held Steady

Bridgette Randall
10 Mar, 2023
Frankfurt

European markets closed lower on the final day of the week and investors reviewed inflation and trade data in the region. 

Germany's inflation held steady in February and France's trade deficit shrank in January after the fall in energy prices but Spain's retail sales surged following the increase in non-food sales. 

Investors also reviewed the latest U.S. employment report which showed solid gains in February. 

Nonfarm payrolls increased 311,000 in February after business in leisure and hospitality and education and healthcare expanded payrolls, the U.S. Labor Department reported on Friday.  

However, the wage gains moderated and jobless rate increased to 3.6% from 3.4% in the previous month. 

 

Germany's Inflation Held Steady In February 

Germany's consumer inflation held steady in February as previously reported, DeStatis or the Federal Statistics Office said on Friday.  

The consumer price index increased 8.7% in the month matching the flash estimate and inflation rate in December. 

Core inflation, which excludes energy and food, rose 5.7% in February.  

Energy inflation from a year ago slowed to 19.1% in February from 23.1% in the previous month however food inflation accelerated to 21.8%, following a 20.2% increase in January.

Goods inflation slowed to 12.4% and service inflation was 4.7% in February. 

Harmonized index of consumer prices on an annual basis increased to 9.3% in February from 9.2% in January and increased to 1.0% from 0.5% in the previous month. 

 

France's Trade Deficit Shrank In January 

The recent decline in energy prices helped France to shrink its international trade gap, the Customs Office said in a report Friday. 

International trade deficit shrank to Є12.9 billion in January from Є14.7 billion in December but the trade gap rose from Є8.7 billion in similar month a year ago. 

On a monthly basis, exports fell 2.2% and imports declined 4.5% from the previous month in January. 

From the previous year, exports increased 9.8% and imports advanced 15.7%. 

 

Spain's Retail Sales Advanced for the Second Month In a Row 

Spain's retail sales rose 5.5% in January following the 4.8% rise in December, the statistics office INE said in a report on Friday. 

Retail sales expanded at the fastest pace in 20 months after non-food products sales rose 15.7% and food products sales decreased 1.7%.  

 

Indexes & Yields 

Banks led the decliners and leading banks in Germany, UK, France and Spain fell between 3% and 6% following a bank run in the U.S. 

Silicon Valley Bank with bank deposits of $175 billion was closed down by the industry regulators after customer deposits accelerated. 

The DAX index declined 1.3% to 15,427.97, the CAC-40 index fell 1.3% to 7,220.67 and the FTSE 100 index dropped 1.7% to 7,748.35.

The yield on 10-year German Bunds eased to 2.46%, French bonds fell to 2.96%, UK gilts to 3.6% and Italian bonds to 4.3%. 

The euro inched higher to $1.06, the British pound to $1.201 and the Swiss franc to 92.1 cents. 

Brent crude oil increased $1.20 to $82.87 a barrel and the Dutch TTF natural gas increased Є8.80 to Є52.40 per MWh. 

 

Europe Movers 

Casino Guichard Perrachon SA declined 5.6% to €8.12 after the French discount grocery store chain reported a smaller loss in the full-year 2022. 

Sandvik  AB decreased 3.3% to kr 208.0 after the Swedish engineering company said it plans to set up a new production unit in Malaysia and invest kr 350 million over the next three years. 

Berkeley Group Holdings PLC decreased 0.5% to 4,015.17 pence after the UK-based homebuilder held its 2023 outlook despite the ongoing economic slowdown.