European Markets Hover Near Record Highs, Euro Area Posted Trade Surplus

Bridgette Randall
20 Apr, 2023
Frankfurt

European markets paused for the second day in a row ahead of central bank announcements in the next few weeks. 

Cautions investors pored over a fresh batch of earnings and debated the future rate paths in the U.S. and the euro area. 

Germany's producer prices sharply eased in March and extended monthly decreases to the sixth month in a row following the downward trajectory of energy prices. 

Investors also welcomed the international goods trade swinging to surplus in February after exports rose faster than imports.

 

Eurozone Posted Trade Surplus In February

The euro area international goods trade swung to a surplus of Є4.6 billion in February from a deficit of Є9.4 in January, Eurostat reported Thursday. 

The Euro Area recorded, for the first time  since September 2021, 

The goods trade surplus in February was €4.6 billion with the rest of the world compared  with a deficit of €9.4 billion in February 2022.

Exports from the region increased 7.6% to €232.7 billion and imports rose 1.1% to €228.1 billion. 

The Euro Are reported a rise in exports with all of its major trading partners. 

Exports to the UK and Switzerland rose 10.4%, to the U.S. 10.9%, to Norway 14%, to Turkey 27.6% and to China 5.8%.  

Exports of manufactured goods increased 7.2% driven by machinery and vehicles exports increase of 13.2% and chemicals 2.3%. 

Overall imports rose 1.1% driven by 1.8% increase in raw materials purchase and fuel imports declined 8.2% and food imports rose 13.2%. 

Imports from Switzerland declined 13.8%, from China fell 4.3% and from Russia plunged 77.3%. 

In January and February 2023, euro area exports of goods to the rest of the world rose 9.2% to €455.3 billion and imports advanced 5.6% to €482.4 billion. 

As a result the euro area recorded a deficit of €27.0 billion, compared with €39.7 billion a year ago. 

 

Germany's Wholesale Price Inflation Dropped In March 

Producer price inflation or wholesale inflation in Germany slowed to 7.5% in March from 15.8% in February, destatis or the Federal Statistics Office reported Thursday. 

The wholesale price decline was largely driven by a steep fall in energy price inflation to 6.8% in February from 27.6% in January, distributed natural gas prices rose 19.1% and electricity prices were flat. 

The preliminary estimate on natural gas and electricity inflation is subject to revision after adjusting for the government subsidy starting March. 

Excluding energy, producer prices rose 7.9% from a year ago. 

Wholesale price inflation on a monthly basis declined 2.6% in March from February, extending monthly decline to the sixth month in a row. 

Prices of non-durable consumer goods increased by 15.4% in March and consumer durable goods rose 10.0% from a year ago. 

 

Indexes & Yields 

The DAX index decreased 0.8% to 15,761.04, the CAC-40 index fell 0.5% to 7,514.71 and the FTSE 100 index declined 0.2% to 7,881.75. 

The yield on 10-year German Bunds decreased to 2.47%, French bonds to 2.97%, the UK Gilts to 3.82% and Italian bonds to 4.33%. 

The euro inched lower to $1.097, the British pound to $1.247 and the Swiss franc to 89.37 cents. 

Brent crude oil decreased $1.08 to $82.05 a barrel and the Dutch TTF natural gas edged up 68 cents to Є40.98 per MWh. 

 

Stock Movers 

Renault SA decreased 6.4% to €34.24 after the French automaker said revenue in the first quarter increased 29% and the company reaffirmed its annual outlook. 

The stock was under pressure after the automaker said the company is reviewing its pricing for electric vehicles worldwide. 

Volvo AB Class B increased 1% to SEK211.25 after the Swedish vehicle and industrial equipment maker posted higher adjusted earnings and lifted its outlook for its heavy duty truck unit on easing supply chain issues. 

Schindler Holding AG increased 0.9% to Sfr 190.80 after the Swiss elevator and escalator maker said first quarter profit jumped 47%. 

Nokia Oyj fell 4.3% to €4.08 after the Finnish telecom and technology company reported weaker-than-expected earnings in the first quarter. 

Centamin PLC declined 0.8% to 105.59 pence after the gold miner reported a decline in gold production from the previous quarter.