European Markets Edged Higher In July Amid Economic Slowdown Worries

Bridgette Randall
03 Jul, 2023
Frankfurt

European markets retained upward bias and investors awaited the release of manufacturing data in the region. 

Market indexes in Frankfurt and Paris advanced for the third quarter in a row and indexes extended gains after inflation in the currency union eased but stayed above the European Central Bank's 2% target. 

Investors are anticipating policymakers to continue advancing interest rates in the months ahead but hoping that the labor market strength, weakening energy prices and robust exports will help the region's economy fall into a recession. 

The Eurozone PMI index in the final reading declined after demand for goods fell sharply towards the end of the second quarter, S&P Global reported in its survey on Monday. 

The Manufacturing Purchasing Managers' Index fell to 43.4 in June from 43.6 in May.  

The Italian operating conditions weakened in June, according to the latest manufacturing industry survey by S&P Global. 

Purchasing Managers' Index declined 43.8 from 45.9 in May, the largest fall in operating environment since April 2020, after production fell the most in three years and sales weakened to an eight-month low. 

In other economic news, Swiss inflation eased to 1.7% in June from 2.2% in May, Swiss Federal Statistical Office reported Monday. 

Falling energy prices, strong Swiss franc and tight price controls kept inflation forces in control. 

In the week ahead, investors are awaiting payrolls data from the U.S. and minutes of meeting from the U.S. Federal Reserve. 

 

Europe Indexes & Yields 

The DAX index increased 0.1% to 16,160.39, the CAC-40 index jumped 0.1% to 7,409.80 and the FTSE 100 index increased 0.3% to 7,554.28. 

The yield on 10-year German Bunds inched higher to 2.39%, French bonds traded lower to 2.93%, the UK gilts edged down to 4.39% and Italian bonds decreased to 4.08%.

The euro edged higher to $1.088, the British pound to $1.267 and the U.S. dollar fetched 89.99 Swiss cents

Brent crude increased $0.68 to $76.69 a barrel and the Dutch TTF natural gas increased €0.38 to €36.70 per MWh.

 

Europe Stock Movers

Tesla Inc soared in Frankfurt trading after the maker of electric vehicles reported record deliveries in the second quarter on Sunday. 

Mining companies gained on the hopes of stimulus from the Chinese government after China's manufacturing index declined in June. 

Glencore, Antofagasta, and Anglo American advanced between 2% and 4%. 

Nokia Oyj increased 2.5% to €3.93 after the company signed a new patent cross-licensing agreement with Apple Inc.  

AstraZeneca Plc declined 5.6% to 10,638.0 after the latest results from a broad study for a cancer drug lagged expectations. 

Saint Gobain SA increased 0.6% to €56.04 after the company signed an agreement to sell its glass processing division COVIPOR in Portugal to PNI Portugal. 

Generali SpA gained 3.3% to €19.24 after Delfin won a regulatory approval to hold more than 10% stake in the Italian insurance company. 

Technip Energies NV increased 0.5% to €20.91 after the French engineering and technology firm said it acquired the sustainable process development company Processium for an undisclosed amount.