European Stocks Traded Sideways, Euro Edged Lower, Natural Gas and Wheat Soared

Bridgette Randall
21 Jul, 2023
Frankfurt

European stocks, bonds and currencies were in focus after a week of volatile trading. 

Stock market indexes in Paris, Frankfurt and London traded down after three days of gains as investors reassessed economic outlook in the face of a sudden spike in wheat prices. 

Wheat prices soared as much as 10% after Russia ended its agreement to permit export of grains from Ukraine and stepped up its bombing campaign on Ukraine's seaports. 

The sudden surge in wheat prices stoked fears of another cycle of inflation starting with food prices.  

The Euro, British pound and Swiss franc traded slightly lower after the U.S. dollar  advanced 1% in what most analysts consider a technical rebound. 

The government bond yields advanced on Friday as the European Central Bank, the Bank of England and the Federal Reserve are set to lift rates higher beginning next week. 

Natural gas prices also surged 6% on top of 4% rise in Thursday's trading to Є30 per MWh on the rising demand for gas powered electric power plants after record temperatures and across the continent drove electricity demand for air cooling.   

Despite the spike in price and demand for natural gas, storage of energy fuel is near 82% full in the region, assuring ample supply.   

In other economic news, UK retail sales rose 0.7% in June from the downwardly revised 1.0% increase in May, the Office for National Statistics reported Friday. 

Retail sales rose for the third month in a row on a monthly basis but declined 1.0% in June from a year ago, the fifteenth month of decline in a row.  

Market sentiment in stocks was decidedly cautious on the final day of trading this week as investors digested the latest batch of earnings. 

 

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 2.44%, French bonds traded higher to 3.0%, the UK gilts edged up to 4.28% and Italian bonds increased to 4.06%.

The euro edged higher to $1.11, the British pound to $1.28 and the U.S. dollar fetched 86.66 Swiss cents

Brent crude increased $0.71 to $80.38 a barrel and the Dutch TTF natural gas increased €1.98 to €30.0 per MWh.

 

Europe Stock Movers

Danske Bank AS rose 1.5% to €22.0 after the largest Danish bank lifted its annual earnings outlook. 

SSAB AB dropped 13% to 65.78 kronor after the Swedish steelmaker said operating profit plunged by 50% in the second quarter. 

Glencore Plc increased 0.05% to 472.85 pence after the mining company reported strong gains in production in the first quarter. 

SAP SE declined 3.3% to €122.22 after the German information system company reported weaker-than-expected cloud segment revenue growth. 

Delivery Hero SE declined 1% to €40.01 after the delivery service provider agreed to acquire a 37% stake in Saudi Arabia based Hungerstation Holding Limited for $297 million.