European Markets Advanced, U.S. Dollar Drifted to 5-week Low

Bridgette Randall
11 Apr, 2023
New York City

European markets traded higher after investors returned from a 4-day holiday period. 

Benchmark indexes in the region opened higher and stayed in the positive territory after retail sales fell as expected in February. 

Market gains were tight as tensions simmered in the Taiwan Strait and developments in Asian markets were also in focus. 

Just days earlier China had stepped its military exercise surrounding Taiwan and accelerated its cyberattack on Taiwan's utilities and telecom companies. 

The U.S. and Philippines are holding their largest joint military exercises a day after China concluded its large-scale defense drills surrounding Taiwan. 

Bank of Korea held its key lending rate as expected but China's inflation unexpectedly declined despite the pick up in economic activities. 

China's annual inflation declined to 0.7% in March compared to 1.0% in February, according to a report from the National Bureau of Statistics of China.  

Core inflation, which excludes food and energy prices, rose 0.7% from a year ago in March after a 0.6% increase in February. 

The Japanese yen declined after the recently appointed governor Kazuo Ueda reiterated the central bank's commitment in maintaining its ultra-loose policy for now. 

In the Euro Area trading, mining and resource stocks led the gainers and investors looked ahead to the start of corporate earnings season this week. 

 

Euro Area Retail Sales Drop In February 

Euro Area retail sales declined 0.8% February after rising 0.8% in January, Eurostat reported on Tuesday. 

The decline in retail sales offered another signal to policymakers of the continued weakening domestic demand in the currency block as consumers battle high inflation and retrench in the face of looming economic slowdown.  

Retail sales fell 3.0% in February from a year ago following a 1.8% decline in January. 

Food drinks and tobacco sales decreased 0.6% and non-food sales eased 0.7%. 

 

Indexes & Yields 

The DAX index added 0.5% to 15,668.53, the CAC-40 index increased 0.9% to 7,391.03 and the FTSE 100 index advanced 0.3% to 7,391.03. 

The yield on 10-year German Bunds traded at 2.27%, French bonds at 2.79%, the UK gilts at 3.52% and Italian bonds at 4.12%. 

The euro inched higher to $1.09, the British pound edged up to $1.24 and the Swiss franc traded at 90.75 cents. 

Brent crude oil eased 38 cents to $83.79 a barrel and the Dutch TTF natural gas inched up 43 cents to Є43.56 per MWh.  

 

Europe Stock Movers 

Resource stocks jumped on the hopes that China may provide additional stimulus to accelerate economic rebound. 

Anglo American, Antofagasta and Glencore advanced between 2% and 3%. 

BMW AG increased 1.7% to €100.32 after the global automobile manufacturer reported a rise in electric vehicle sales. 

BP Plc increased 0.3% to 533 pence and Harbour Energy PLC dropped 1.7% to 283 pence after the two companies agreed to jointly build and develop Viking transportation and storage project.