European Stocks Turn Lower, Bond Yields at 12-year Highs, Euro and Pound 14-month Highs

Bridgette Randall
19 Jun, 2023
Frankfurt

European markets turned lower after setting milestones in the previous week. 

Benchmark indexes in Frankfurt, London and Paris declined as investors reassessed the economy's health in the face of elevated interest rates. 

The Bank of England is set to lift its interest rate by 25 basis points to a 15-year high of 4.75% at the end of its policy meeting on Thursday. 

Thursday's rate hike will be the 13th in a row and is expected to cool down inflation that has been hovering above 9%. 

Investors are also awaiting rate increase decision in China on Tuesday and the People's Bank of China is expected to lift its loan prime rate on Tuesday by 10 basis points. 

Trading volumes are expected to light today as the U.S. markets are closed for the Juneteenth holiday. 

 

Europe Indexes & Yields 

The DAX index decreased 0.5% to 16,272.18,  the CAC-40 index declined 0.5% to 7,350.17 and the FTSE 100 index fell 0.3% to 7,622.64.

The yield on 10-year German Bunds inched higher to 2.49%, French bonds traded higher to 3.02%, the UK gilts edged up to 4.45% and Italian bonds increased to 4.08%.

The euro edged lower to $1.09, the British pound to $1.28 and the Swiss franc to 89.47 cents.

Brent crude decreased $0.34 to $74.26 a barrel and the Dutch TTF natural gas decreased €2.70 to €32.31 per MWh.

 

Europe Stock Movers

Coca Cola HBC AG declined 2.3% to €26.78 after the company agreed to acquire the Finlandia Vodka brand for $220 million from Brown-Forman. 

AstraZeneca Plc declined 0.9% to 11,684.0 pence on the news that the company is looking to spin off its China business. 

MTU Aero Engines AG increased 3.4% to €234.40 after the company revised higher its 2023 annual outlook. 

Resource companies traded down on the worries of weakening demand from metal manufacturing companies. 

Glencore, Antofagasta, and Anglo American declined between 1% and 2%. 

Luxury stocks declined after China's State Council failed to announce no new measures to boost economic growth after a meeting on Friday. 

Hermes International SCA declined 0.8% to €1,969.80 and LVMH dropped 1.1% to €859.10.  

Spectris plc edged up 0.08% to 3,708.25 pence after the company signed an agreement to acquire MicroStrain Sensing Systems Business for 37.6 million.

Sartorius AG plunged 16.3% to €247.50 after the lab equipment maker lowered its 2023 outlook on weaker-than-expected demand in the second half.  

British American Tobacco added 0.5% to 2,592.50 pence after the company announced significant changes to its board. 

Surface Transforms Plc decreased 1.5% to 32.50 pence after the company appointed Isabelle Maddock as new Chief Financial Officer from September 4.