European Markets Trimmed Weekly Losses, Retail Sales Fell 8th Consecutive Month

Bridgette Randall
04 Aug, 2023
New York City

European markets attempted a rebound after three-day losses on economic worries. 

Market averages in Paris, London and Frankfurt traded slightly higher in listless trading and investors reviewed retail sales data in the Euro Area and German factory orders. 

Crude oil rebounded after Russia and Saudi Arabia extended voluntary production cuts by 1.3 million barrels a day in an effort to revive prices closer to $90 a barrel. 

 

Germany Factory Orders Unexpectedly Accelerated In June 

German factory orders unexpectedly rose 7% from the previous month in June, the Federal Statistics Office reported Friday. 

New orders rose 3.0% from a year ago. 

Orders rose for the third month in a row and increased at the fastest pace in the period, driven by large orders from the aerospace industry. 

Factory orders in May were downwardly revised to an increase of 6.2%. 

New orders for mechanical engineering advanced 5.1%, and orders for other vehicle construction jumped 89.2%, driven by the demand in the aerospace industry. 

However, orders for motor vehicles and their parts declined 7.3% and orders for capital goods increased 9.9%, while orders for intermediate and consumer goods inched higher 2.0% and 7.7%, respectively. 

Excluding large-scale orders, new orders declined 2.6%. 

Meanwhile, foreign orders increased 13.5%, driven in part by orders from the Euro Area  by 27.2% and orders from the rest of the world by 5.0%, but domestic orders declined 2%. 

In the three-month period to June, factory orders rose only 0.2%.

 

Euro Area Retail Sales Declined In June 

Euro area retail sales declined 0.3% from the previous month in June, Eurostat reported Friday. 

Retail sales in May were revised to 0.6% in May. 

On a yearly basis, seasonally adjusted retail sales declined 1.4% in June, slower than 2.4% in May and sales declined for the eighth month in a row. 

Sales fell for food, drinks, tobacco 0.3% matching the rate in May, and non-food products decreased 0.2% compared to 0.6%. 

However, sales for automotive fuel increased 1% from 0.5% and non-store sales by mail orders and internet increased 1.1% compared to a decrease of  1%. 

In other economic news,  France's industrial production fell 0.9% in June, following a revised 1.1% increase in May, France's statistical office INSEE reported Friday. 

 

Europe Indexes & Yields

The DAX index increased 0.2% to 15,915.71, the CAC-40 index rose 0.5% to 7,297.59 and the FTSE 100 index edged higher 0.03% to 7,531.65.  

For the week, the DAX index declined 3%, the CAC-40 fell 2.8% and the FTSE 100 index dropped 2.2%. 

The yield on 10-year German bonds increased to 2.60%, 8rench bonds traded higher to 3.17%, the UK gilts edged up to 4.49% and Italian bonds increased to 4.29%.

The euro edged lower to $1.091, the British pound to $1.271 and the U.S. dollar fetched 87.75 Swiss cents.

Brent crude increased $0.41 to $85.56 a barrel and the Dutch TTF natural gas increased €1.47 to €29.01 per MWh.

 

Europe Stock Movers

Credit Agricole SA increased 6.4% to €11.90 after the French lender reported better-than-expected earnings in the second quarter, driven by consumer lending and insurance demand. 

BNP Paribas SA jumped 1.5% to €59.18 after the French lender announced a stock buyback plan. 

Sika AG decreased 0.5% to CHF 266.90 despite the Swiss chemical company revised higher 2023 sales outlook. 

Deutsche Wohnen SE increased 0.6% to €22.42 after the company said it is reviewing the possibilities of selling its portfolio of nursing care properties. 

Commerzbank AG declined 1.7% to €10.78 despite the German lender revising higher its net interest margin and 2023 earnings outlook. 

WPP Plc declined 6.4% to 792.96 pence after the UK-based advertising group lowered its sales outlook for the year.