European Markets Trim Weekly Losses, UK Retail Sales Rebounded

Bridgette Randall
26 May, 2023
Frankfurt

European markets traded higher in a tentative rebound after three days of down days and bond yields continued to drift upwards. 

The U.S. debt ceiling talks appear to be heading in the right direction and expectations ran high that two sides are close to striking a deal as early as tomorrow, just in time to avoid a federal government default. 

The preliminary agreement will hold the federal government spending to fiscal 2023 level for the next two years to raise the U.S. debt ceiling level. 

 

UK Retail Sales Rebounded In April 

UK retail sales in April increased 0.5% from March, the Office for National Statistics reported Friday. 

Retail sales recovered on the back of higher food and non-food sales from the 1.2% decline in March. 

On a yearly basis, retail sales declined 3.0%, following a 3.9% in March. 

Food store sales rebounded to 0.7% increase in April after falling 0.8% in March and non-food store sales rose 1.0%, recovering from a 1.8% decline in March.  

The online retail sales across all channels increased 0.2% but fuel sales at pump stations declined 2.2% despite the recent decline in fuel prices. 

In the three months to April, retail trade sales increased 0.8% from the previous three months, the largest increase since August 2021. 

 

Europe Indexes & Yields 

The DAX index increased 0.2% to 15,823.78,  the CAC-40 index increased 0.3% to 7,250.31, and the FTSE 100 index increased 0.2% to 7,584.15. 

For the week, the DAX index declined 2.7%, the CAC-40 index fell 3.1% and the FTSE 100 index dropped 2.2%. 

The yield on 10-year German Bunds inched up to 2.49%, French bonds traded higher to 3.08%, the UK gilts inched higher to 4.32% and Italian bonds increased to 4.37%.

The euro edged lower to $1.07, the British pound to $1.23 and the Swiss franc to 90.22 cents.

Brent crude increased 46 cents to $76.75 a barrel and the Dutch TTF natural gas decreased €0.55 to €24.91 per MWh.

 

Europe Stock Movers 

Mining companies advanced around 3% on the optimism surrounding the U.S. debt deal talks. 

Anglo American, Antofagasta and Glencore rose between 2.5% and 3%. 

Petrol station operator EG Group and supermarket chain Asda are in a final stage of merging their operations in a deal valued at £10 billion. 

Volkswagen Group increased 0.4% to €118.54 after the company and its subsidiary Audi reached a preliminary $85 million settlement with the Texas environmental agency for charges linked to the diesel cheating scandal. 

AstraZeneca Plc increased 0.3% to 11,678.0 pence after its two cancer drugs Imfinzi and Lynparza indicated positive results in late-stage trials. 

Casino Guichard Perrachon SA declined 8.7% to €6.18 after the grocery chain operator said it has initiated  court-backed discussions with its creditors.