European Markets Rally, French Industrial Production Rebounded, Jobless On Record In Spain Dropped

Bridgette Randall
02 Jun, 2023
Frankfurt

European markets rebounded sharply on the final day of the week after the U.S. Senate passed the debt ceiling agreement. 

The bill is ready to be signed by the U.S. President Joe Biden,  just in time to avert the catastrophic debt default date set by the U.S. Treasury as early as June 5. 

Investors also digested the latest data on industrial production in France and a sharp decline in registered jobless people in Spain.  

After a volatile week, the DAX index was nearly unchanged, the CAC 40 declined 1.5% and the FTSE 100 index decreased 0.2%. 

Despite the volatility of the last two weeks rooted in the U.S. debt default worries, three leading benchmark indexes are trading near record peaks. 

 

French Industrial Production Rebounded In April

Industrial output increased 0.8% from the previous month in April after declining 1.1% in March. France's statistical office INSEE reported Friday. 

On an annual basis, industrial production rebounded 1.3% from a decline of 0.1% in March. 

Output rebounded in all sectors and the sharp recovery in petroleum production led the advance. 

Manufacturing production increased 0.7% from 1.1% fall after petroleum refining production soared 23.6% from 45.6% decline,  electrical equipment recovered to 1.5% from 6.2% fall, mining & quarrying, energy, water supply, waste management increased 1.8% from a 1.2% decline and construction increased 0.8% from a fall of 0.9%.

 

Jobless On Record In Spain Dropped In May

The number of people registered as jobless in Spain, at the end of May, fell 49,260 or 1.8% from the previous month to a total of 2.74 million, the lowest for the month of May since 2008.

From a year ago, unemployment fell 183,881 or 6.29%, according to data released by the Ministry of Labor and Social Economy on Friday. 

Unemployment fell across all sectors, in the services by 34,665 or 1.74%, in industry by 4,622  or 2.07%, in construction by 3,896 or 1.82% and agriculture by 2,501 or 2.30%.

By region, the largest decreases were reported in Andalucía of 6,521, in Castilla-La Mancha of 6,138 and Galicia of 4,909.

The number of registered unemployed young people aged less than 25 declined 7,208 or 3.7% to 188,043, the lowest in May since record keeping began in 1986.  

A day ago, Eurostat reported Spain led the Euro Area with the highest jobless rate of 12.7% in April.

 

Europe Indexes & Yields 

The DAX index increased 1.0% to 16,009.90, the CAC-40 index rose 1.1% to 7,221.98, and the FTSE 100 index advanced 1.0% to 7,561.45.

The yield on 10-year German Bunds inched lower to 2.28%, French bonds traded lower to 2.84%, the UK gilts held at 4.15% and Italian bonds decreased to 3.99%.

The euro edged lower to $1.077, the British pound to $1.254 and the Swiss franc to 90.52 cents.

Brent crude increased $1.17 to $75.40 a barrel and the Dutch TTF natural gas increased €0.84 to €23.95 per MWh.

 

Europe Stock Movers 

Resource stocks extended gains for the second day in a row after copper extended gains of the last two weeks. 

Antofagasta, Anglo American and Glencore jumped between 4% and 6%. 

BP Plc and Shell Plc increased between 1.5% and 2.0% ahead of the OPEC+ meeting on June 4. 

Traders are betting that the oil producing nations may announce additional production cuts to support the faltering oil prices, after the commodity fell 10% in May. 

Dechra Pharmaceuticals plc soared 8.2% to 3,652.0 pence after the veterinary products developer agreed to go private in a £4.46 billion deal with EQT. 

ProSiebenSat.1 Media SE increased 2.6% to €8.04 after the Czech investment group lifted its stake in the media company. 

PayPoint Plc increased 6.5% to 402.10 pence after the company reiterated  its full-year outlook.