Eurozone Core Inflation Stayed Near Record High, EU Car Registration Growth Slowed

Bridgette Randall
17 May, 2023
Frankfurt

European markets hugged the flatline after consumer inflation accelerated in April and automobile sales in April slowed from the previous month. 

Stocks were in a holding pattern after inflation accelerated in April despite the cooling of energy prices in the European Union as inflation but service prices rose at a faster pace. 

Automobile stocks advanced after unit sales rose in April and electric vehicles increased market share. 

Investors remained cautious and awaited the outcome of the debt ceiling talks in the U.S. as president Joe Biden and congressional leaders struggled to find a common ground. 

Despite the debt ceiling talks uncertainties, global markets are hoping that the U.S. lawmakers will lift the debt ceiling higher and avoid the U.S. government default. 

The U.S. Treasury is estimated to run out of funds in about three weeks, yet three leading rating agencies S&P Global, Moody's and Fitch have been silent. 

 

Core Inflation Stays Near Record High 

Consumer price inflation in the Euro Are increased to 7.0% in April, Eurostat reported Wednesday.

Inflation accelerated from a 13-month low of 6.9% in March after energy prices rebounded to 2.4% increase in April from 0.9% decline in March and cost of services accelerated to 5.2% from 5.1%. 

Core inflation, which excludes food, energy, alcohol and tobacco, slowed to 5.6% in April from the record high 5.7% in March.  

Hungary led the region with consumer price inflation of 24.5%, followed by 15% in Latvia, 14.3% in Czechia, and 14.% in Slovakia. 

Annual inflation in Italy was 8.7%, Germany 7.6%, France 6.9% and Spain 3.8%.  

 

EU Car Registration Growth In April Slowed from March 

Car registration in the European Union soared 17.2% to 803,188 in April, the European Automobile Manufacturers Association reported Wednesday. 

Passenger car sales increased for the ninth month in a row and sales in the first four months to April rose 17.8% from a year ago to 3.5 million, still down 22.8% from the same period in 2019.  

Among the four largest markets in the European Union, unit sales surged 33.7% in Spain, 26.9% in Italy, 16.7% in France and 7.9% in Germany.   

Battery electric car share of the market increased to 11.8% from 9.1%, hybrid car share rose to 24.8% and petrol cars led by 38.2%. 

 

Europe Indexes & Yields 

The DAX index increased 0.3% to 15,943.40, the CAC-40 index fell 0.2% to 7,395.27 and the FTSE 100 index advanced 0.05% to 7,747.49. 

The yield on 10-year German Bunds inched up to 2.31%, French bonds traded slightly higher to 2.89%, the UK gilts inched lower to 3.79% and Italian bonds increased to 4.18%.

The euro edged lower to $1.082, the British pound to $1.244 and the Swiss franc to 89.91 cents.

Brent crude increased 20 cents to $75.12 a barrel and the Dutch TTF natural gas increased €0.73 to €32.55 per MWh.

 

Europe Stock Movers 

AstraZeneca increased 0.6% to 12,146.0 pence after the drug maker reported positive results in the discovery of a lung cancer trial. 

SAP SE advanced 1.6% to €123.28 after the German software company announced a stock repurchase program of up to €5 billion.  

Commerzbank AG declined 6.6% to €9.23 despite the German lender saying net income in the first quarter nearly doubled. 

London Stock Exchange Group Plc dropped 3.5% to 8,172.0 pence after a consortium of investors sold stocks in the exchange operator worth about £2.7 billion.  

British Land Company PLC decreased 5.2% to 358.30 pence after the company reported a pre-tax loss in the fiscal year 2023 ending in March. 

JD Sports Fashion Plc declined 5.8% to 160.45 pence after the specialty retailer said pre-tax income declined the fiscal year 2023. 

Siemens AG increased 2.5% to €153.42 after the Germany based industrial engineering company lifted its annual sales outlook on stronger order inflow and higher-than-expected profit in the fiscal second quarter.