European Markets In Longest Winning Streak In Four Months Hoping Monetary Pause

Bridgette Randall
14 Apr, 2023
Frankfurt

Benchmark indexes in Europe extended gains after inflation indexes in France and Germany eased. 

Germany's wholesale prices index fell sharply in March and French consumer price index eased following the sharp decline in energy prices. 

Cooling inflation trends in the U.S. and Europe raised hopes that the central bankers are nearing an end to aggressive rate increase cycle and may pause after the next meeting in May. 

Singapore held its monetary policy tightening and also lowered its estimate of economic growth in 2023. 

Singapore joined other central banks in India, Australia, Canada and South Korea that already paused rate hikes. 

Stocks in the Eurozone opened higher and extended gains ahead of the start of earnings season in the U.S. and Europe. 

Investors are awaiting earnings results from U.S. banks and benchmark indexes are set for their longest weekly advance since early December. 

 

German Wholesale Inflation Fell Sharply In March 

The German wholesale price index declined for the sixth month in a row and slipped to the rate last seen in January 2021, the Federal Statistics Office or Destatis reported Friday. 

On a monthly basis, the wholesale price index increased 0.2% after rising 0.1% in February. 

Wholesale price index over the year increased 2.0% in March, slower than 8.9% in February, reflecting a sharp negative swing in energy and petrochemical related products.

Prices of materials and residues decreased 29%, petroleum products decreased 17.9% and metals and ores dropped 14.1%.  

However, prices of food, beverages and tobacco increased 16.4%, reflecting meat and meat products price increase of 20.0%, fruits, vegetables and potatoes 20% and milk and dairy products, eggs, edible oils and fats 19.6% and building materials and elements 19.8%. 

Wholesale price inflation has been on the decline after peaking at 23.6% in March 2022. 

 

French Consumer Price Inflation Slowed in March 

France's consumer price index inflation slowed to 5.7% annual rate in March, from 6.3% increase in February, the statistical office Insee reported Friday. 

The final estimate of consumer inflation was revised higher from the flash estimate of 5.6%. 

 

Indexes & Yields 

The DAX index increased 0.4% to 15,788.0, the CAC-40 index rose  0.3% to 7,500.77 and the FTSE 100 index advanced 0.3% to 7,868.80. 

The yield on 10-year German Bunds increased to 2.36%, French bonds to 2.87%, the UK gilts to 3.56% and Italian bonds to 4.21%. 

The euro inched higher to $1.106, the British pound to $1.251 and the Swiss franc to 88.75 cents. 

Brent crude oil increased 10 cents to $86.19 a barrel and the Dutch TTF natural gas eased 60 cents to 41.49 per MWh. 

 

Europe Stock Movers 

Dechra Pharmaceuticals plc soared 34% to 3,732.0 after the veterinary products maker confirmed it is in talks with private equity group EQT for a possible offer of £4.63 billion. 

Hermes International SCA increased 1.1% to €1,966.80 after the French luxury products maker said sales in the first quarter increased 22% to €3.38 billion. 

Sales in Europe increased 22.9%, Asia jumped 20.9% and in the Americas 23.9%.   

YouGov Plc increased 2.3% to 880 pence after the company appointed Steve Hatch as its next chief executive. 

TomTom NV advanced 5.3% to €8.0 after the Dutch navigation firm returned to profit in the first quarter. 

888 Holdings Plc soared 17.9% to 72.89 pence after the online sports betting and gambling company reported a double-digit increase in annual revenue. 

Group revenue in the fiscal year ending in March surged 74% to £1,238.8 million, and adjusted operating income  increased 82% to £217.9 million, including the purchase of William Hill on July 1, 2022. 

Proforma profit declined to 64 .2 million from 82.6 million and earnings per share fell to 15.1 pence from 22.2 pence a year ago, adjusting for the William Hill transaction.