New Highs In DAX and CAC-40 Indexes, Spain and Italy Trade Balances Improved

Bridgette Randall
18 May, 2023
Frankfurt

European stock markets rebounded in light trading after U.S. debt ceiling talk picked up pace. 

Trading was light after financial markets were closed in Nordic countries and Switzerland. 

Benchmark indexes in Germany and France traded at new highs and surpassed the previous peaks in January 2022. 

Markets advanced after the U.S. President Joe Biden and House Speaker Kevin McCarthy vowed to avoid the government default. 

Congressional leaders and Biden are expected to announce an agreement that will permit the lifting of the debt ceiling from $31.4 trillion. 

However, any agreement still needs to be approved by the U.S. House and the Senate in the next two to three weeks before the federal government runs out of funds. 

 

Spain's Trade Deficit Narrowed In March 

Spain's trade deficit narrowed in March to €0.16 billion after exports increased 17.7% from a year ago to €38.9 billion and imports jumped 3.6% to €39.09 billion.  

Exports to the European Union surged 15.4%, the United Kingdom increased 21.3%, the United States advanced 27.9%, and Latin America soared 62.7%. Exports to China increased 42.6% and Japan decreased 5.6%. 

In the first three months of 2023, exports soared 14.6% to €102.6 billion and imports decreased 6.8% to €109.2 billion resulting in a trade deficit of €6.6 billion. 

 

Italy's Trade Surplus Expanded In March 

Italy's international trade swung to a surplus of €7.5 billion in March from a deficit of €0.76 billion a year ago, the statistical office Istat reported Wednesday. 

The trade surplus accelerated from €2.1 billion in February after non-energy products exports expanded in the month. 

Trade surplus was the largest since July 2021, when the surplus reached a record high of €8.2 billion. 

Exports rose at a slower pace of 4.7% from a 10.4% rise in March and imports declined 9.8% reversing an increase of 3.2% in the previous month. 

On a seasonally adjusted basis, exports declined 2.3% and imports fell 6.5%, lifting the surplus in March to €5.54 billion from €3.5 billion in February.  

 

Europe Indexes & Yields 

The DAX index increased 1.5% to 16,196.05,  the CAC-40 index rose 0.9% to 7,462.45., and the FTSE 100 index advanced 0.6% to 7,771.16.

The yield on 10-year German Bunds inched up to 2.39%, French bonds traded higher to 2.98%, the UK gilts inched higher to 3.89% and Italian bonds increased to 4.25%.

The euro edged lower to $1.081, the British pound to $1.245 and the Swiss franc to 90.36 cents.

Brent crude decreased 41 cents to $76.54 a barrel and the Dutch TTF natural gas decreased €1.06 to €30.96 per MWh.

 

Europe Stock Movers 

Deutsche Bank AG increased 3.5% to €9.72 after Germany's largest bank settled a lawsuit for $75 million brought by women who alleged that the bank facilitated sex trafficking activities of the late Jeffrey Epstein. 

Burberry Group Plc decreased 5.7% to 2,377.0 pence after the UK-based luxury apparel and accessories company reported same store sales increased 16% from a year ago. 

EasyJet Plc increased 0.8% to 524.60 pence after the deep discount airline operator narrowed its first-half loss on rising international traffic. 

BT Group Class A stock plunged 7.3% to 137.25 pence despite the UK-based telecom group reporting 5% increase in adjusted annual core earnings. 

The telecom company also announced a plan to eliminate 55,000 jobs. 

International Distribution Services Plc declined 0.7% to 220.60 pence after the parent of Royal Mail reported an annual adjusted operating loss of £419 million. 

Premier Foods Plc advanced 3.9% to 134.64 pence after the company posted strong annual profit and increased its dividend.