Eurozone Wholesale Inflation Slowed, Stable German Trade Surplus In February

Bridgette Randall
04 Apr, 2023
Frankfurt

Benchmark indexes in the Euro Area trimmed early gains and two inflation reports showed weakening trends in the region. 

Wholesale price inflation in the eurozone slowed in February after energy prices cooled further. 

Moreover, a survey from the European Central Bank showed that consumers lowered their expectations of inflation in February. supporting the weakening inflation trend. 

Moreover, Germany's exports continued to climb at a steady pace on the back of sustained demand from the U.S. and China. 

Weaker-than-expected U.S. manufacturing growth and the number of job openings declined to the low last seen in may 2021 also encouraged investors that inflation trends are easing in the largest economy in the world. 

 

Germany's International Goods Trade Surplus Stable 

German international trade showed steady growth from the previous month and a year ago in February, the Federal Statistics Office said Tuesday. 

February goods exports adjusted for seasonal and calendar factors increased 4.0% from the previous month and rose 7.6% from a year ago to Є136.7 billion. 

Goods imports in February adjusted for seasonal and calendar factors increased 4.6% from the previous month and 3.8% from a year ago to Є120.7 billion. 

From a year ago, exports growth more than halved to 6.3% in February from 12.8% in the previous month and imports rose 2.6%, weaker than the  9.1% surge in January. 

International goods trade surplus was stable from the previous month and jumped 49.7% from a year ago to Є16.0 billion. 

 

Eurozone Wholesale Inflation Slowed In February  

Wholesale prices in the eurozone slowed further in February after energy prices continued to slide, the latest report from Eurostat indicated Tuesday. 

Producer price index, a measure of wholesale prices, increased 13.2% in February after rising at 15.1% in January, the slowest increase since a 12.4% rise in January 2021. 

Excluding energy, producer price increase slowed to a moderate pace of 10.2% in the month from 11.1% in the previous month. 

Energy price increase slowed to 17.4% in the month after January's 20.7% rise in January. 

Intermediate goods inflation slowed to 9.3% from 11.2% in the previous month. 

On a monthly basis, the producer price index declined 0.5% in February after energy prices decreased 1.6% 

 

Europe Indexes & Yields 

The DAX index increased 0.1% to 15,603.47, the CAC-40 index declined 1.0 points to 7,344.96 and the FTSE 100 index decreased 0.5% to 7,634.52. 

The yield on 10-year German Bunds edged up to 2.26%, French bonds rose to 2.75%, the UK Gilts to 3.43% and Italian bonds to 4.12%. 

The euro inched higher to $1.095, the British pound edged up to $1.25 and the Swiss franc to 90.82 cents.  

Brent crude oil gained 35 cents to $85.30 a barrel and the Dutch TTF natural gas fell Є4.02 to Є47.25 per MWh. 

 

Europe Stock Movers 

L'Oreal SA increased 0.9% to €419.25 after the France-based luxury products company agreed to acquire Australia's luxury brand Aesop from Brazil-based Natura & Co for an enterprise value of $2.53 billion. 

Natura plans to use proceeds to lower its debt and focus on Avon and The Body Shop businesses in Latin America. 

OKYO Pharma Ltd plunged 26.8% to 1.50 pence after the bio-pharma company announced its plan to delist its stock from the London Stock Exchange in May.  

NatWest Group PLC decreased 0.2% to 263.70 pence after the UK government extended the deadline to lowering its stake in the bank by two more years. 

Nordex Group SE decreased 0.3% to €13.15 after the German wind turbine maker won a 106 MW wind project in Lithuania from E energija group.