European Markets Attempt a Rebound, Euro, Pound and Swiss Franc Edge Higher

Bridgette Randall
20 Jul, 2023
Frankfurt

Market averages in Europe attempted a rebound and investors reviewed another batch of fresh earnings. 

European government bond yields edged higher and the yield on Italian bonds jumped above 4% and stayed below the UK gilts. 

Investors are anticipating the European Central Bank to raise hike rates at its next policy meeting but the rates are still not restrictive. 

Investors are also worried that the uneven economic recovery in China could dampen demand for industrial and luxury goods from the region but the demand in the U.S. could hold if the Federal Reserve manages to avoid dipping the economy into a recession. 

Closer to home, German's producer price inflation slowed in June to 0.1% from 1% annual pace in May, the Federal Statistics Office or DeStatis reported Thursday.   

Producer prices fell 0.3% on a monthly basis in June after falling 1.4% in May, largely driven by a sharp fall in prices of energy by 5% and electricity by 12.4%. 

 

Europe Indexes & Yields

The DAX index increased 0.2% to 16,147.21, the CAC-40 index advanced 0.4% to 7,352.81 and the FTSE 100 index increased 0.6% to 7,637.29. 

The yield on 10-year German bonds increased higher to 2.41%, French bonds traded lower to 2.97%, the UK gilts edged up to 4.21% and Italian bonds increased to 4.09%.

The euro edged higher to $1.19, the British pound to $1.28 and the U.S. dollar fetched 85.88 Swiss cents

Brent crude increased $0.39 to $79.85 a barrel and the Dutch TTF natural gas increased €0.24 to €27.10 per MWh.

 

Europe Stock Movers

ABB Ltd gained 2.9% to CHF 34.42 after the Swiss engineering company reported a rise in earnings on strong revenue growth. 

Revenue in the second quarter rose 13% to $8.1 billion from $7.2 billion and  earnings soared 139% to $906 million from $379 million and basic earnings per share jumped to 49 cents from 20 cents a year ago.  

New orders in the quarter declined to $8.67 billion from $8.81 billion with 5% increase in the Americas and mid-single digit increase in the U.S.

ASML Holding NV declined 4% to €626.10 and extended two day losses to 7% despite the Netherlands-based semiconductor equipment maker reported higher revenue and earnings and said demand from China remained strong. 

Electrolux AB plunged 20.5% to kr122.0 after the Swedish appliance maker reported sales declined 8% in its latest quarter. 

Revenue in the quarter declined 8.4% to SEK 32.6 billion and the company swung to a loss of SEK 648 million from a profit of SEK 257 million and diluted earnings per share was (SEK 2.43) from a profit of SEK 0.93. 

Sales were impacted by weaker demand and customers opting for cheaper priced products.