European Markets Rebounded, Euro Area Jobless Rate Dropped to New Low

Bridgette Randall
03 May, 2023
Frankfurt

European markets reversed 1% decline in the previous session after traders returned to increase positions in industrial and financial companies. 

The Federal Reserve is widely expected to announce its rate decision later in the day and discuss rate path and the U.S. economy's health at a press conference at 2:30 p.m. ET. 

The European Central Bank is also expected to increase its key lending rate by at least 25 basis points at the conclusion of its policy meeting on Thursday. 

Investors reacted to corporate news and Lufthansa reported a surge in revenue on the rebound in travel demand. Porsche reported higher sales driven by an increase in vehicle deliveries and BNP Paribas reported higher-than-expected first quarter total revenue. 

 

Euro Area Jobless Rate Drops to New Low 

The jobless rate in the Euro Area declined to 6.5% in March, the lowest rate on record, Eurostat reported Wednesday. 

The rate declined from 6.6% in February and fell from 6.8% in March 2022. 

The statistical agency estimated that 12.960 million in the EU, including 11.010 million in the euro area, were unemployed in March.

From the previous month, unemployment decreased by 155,000 in the EU  and by 121,000 in the euro area and from a year ago unemployment decreased 353,000 in  the EU and 365,000 in the euro area.

In March, the youth unemployment rate eased to 14.3% both in the EU and in the euro area, down from 14.5% and 14.4% respectively in the previous month.

Spain led the jobless rate in the currency union with 12.8%, followed by 10.9% in Greece, 7.8% in Italy and 7.3% in Sweden. Germany recorded an unemployment rate of 2.8% and the Netherlands 3.5% and France 6.9%. 

 

Europe Indexes & Yields 

The DAX index increased 0.7% to 15,842.68, the CAC-40 index advanced 0.8% to 7,441.40 and the FTSE 100 index added 0.2% to 7,793.97. 

The yield on 10-year German Bunds eased to 2.23%, French bonds to 2.83%, the UK gilts to 3.65% and Italian bonds to 4.12%.

The euro hovered near a one-year high against the dollar as the U.S. economy faced banking turmoil. 

The euro edged higher to $1.103, the British pound to $1.256 and the Swiss franc to 88.86 cents.

Brent crude fell $2.13 to $73.15 a barrel and the Dutch TTF natural gas decreased €0.64 to €36.89 per MWh.

 

Europe Stock Movers 

Deutsche Lufthansa AG declined 1.7% to €9.47 after the German airline reported a surge in revenue in the first quarter. 

Revenue in the first quarter soared 40% to €7.0 billion from €5.0 billion a year ago. 

Net profit shrank 20% to €467 million from €520 million and diluted earnings per share fell to 39 cents from 49 cents a year ago.  

The passenger count increased 64% to 21.6 million and passenger load factor jumped 14.3 percentage points to 79.7% from 65.4% but cargo load factor declined to 58.7% from 68.1% a year ago. 

BNP Paribas SA increased a fraction to €57.0 after the French bank reported higher-than-expected revenue. 

Revenue in the first quarter increased 1.4% to €12.03 billion from €11.87 billion a year ago. 

Pre-tax net income from continuing operations in the quarter declined 9.4% to €2.37 billion from €2.62 billion a year ago.  

Porsche Automobil Holding SE increased 0.3% to €49.76 after the company reported higher deliveries in the first quarter. 

First quarter revenue rose 25.5% to €10.10 billion from €8.04 billion a year ago and operating profit rose 25.4% from €1.47 billion to €1.84 billion.

Vehicle deliveries in the quarter increased 18% to 80,767 from 68,426 a year ago.