German Business Confidence Weakened, Spain's Producer Prices Fall, Ruble Volatile

Barry Adams
26 Jun, 2023
New York City

European markets struggled on Monday after investors reviewed energy markets and bond yields held steady following the events over the weekend. 

The Russian paramilitary Wagner group gave up their threat to advance to Mosco and avoided a potentially bloody confrontation with the Russian military. 

Despite the ending of mutiny by the Russian rebel group, worries persisted about the security of the nuclear arsenal. 

The Wagner group's threat to march to Mosco unnerved energy markets and natural gas prices shot up as much as 10% in Amsterdam trading. 

Crude oil prices soared as much as 2% before retreating to the level last seen on Friday. 

The Russian ruble dropped to as low as 87 against the U.S. dollar and extended this year's loss to 17%. 

 

German Business Confidence Drops to 6-month Low 

The German IFO Business Climate Index declined to 88.5 in June from the downwardly revised 91.5 in May, the IFO Institute reported Monday. 

The business confidence index dropped to the lowest level since December on persistent worries about economic uncertainties and manufacturing reported falling new orders after rates around the world continued to advance.  

 

Spain's Wholesale Inflation Declined for 3rd Month In a Row

Spain's producer price index declined 6.9% in May following the fall of 4.5% in April, the National Statistics Institute reported Monday. 

The measure of wholesale prices declined for the third month in a row after energy prices plunged 24.9% and intermediate goods decreased 4% but prices for consumer goods rose 10.5%.  

On a monthly basis, the producer price index declined 1.6% following 1.9% fall in April. 

 

Europe Indexes & Yields 

The DAX index decreased 0.3% to 15,782.42,  the CAC-40 index declined 0.02% to 7,162.62 and the FTSE 100 index dropped 0.3% to 7,437.15.

The yield on 10-year German Bunds inched lower to 2.31%, French bonds traded lower to 2.83%, the UK gilts edged down to 4.30% and Italian bonds decreased to 3.94%.

The euro edged higher to $1.09, the British pound to $1.273 and the U.S. dollar fetched 89.32 Swiss cents.

The ruble recovered to 84.40 after falling sharply over the weekend after the paramilitary Wagner group threatened to march to Moscow, challenging President Putin's 23-year rule. 

Brent crude increased $0.48 to $74.35 a barrel and the Dutch TTF natural gas increased €1.64 to €34.15 per MWh.

 

Europe Stock Movers

Bank stocks were hit the hardest in today's session after political turmoil heightened energy supply worries and stoked fears of renewed inflation. 

Commerzbank, Deutsche Bank, Lloyds Banking Credit Agricole and BNP Paribas declined between 2% and 3%. 

Aston Martin Lagonda Global Holdings Plc soared 9.4% to 358 pence after the luxury automaker struck a deal with the U.S.-based Lucid Group to manufacture "high performance" electric vehicles. 

Associated British Foods plc decreased 0.9% to 1,934.50 pence despite the company lifting its outlook for the fiscal year. 

Euronext NV declined 0.6% to €63.05 after the stock exchange group agreed to sell its 11.1% stake in LCH SA to LCH Group Holdings Limited for €111 million. 

SCOR SE increased 0.8% to €24.95 after the company appointed Fabrice Bregier as chairman of the company's board. 

SBB Group soared 11.6% to SKK 3.67 after the embattled Swedish property group said it is actively looking to sell its remaining 51% stake in its education unit.