Euro Area Economy Expanded In Second Quarter, UK Inflation Eased

Bridgette Randall
16 Aug, 2023
Frankfurt

European markets traded higher and investors reviewed the latest industrial production data in the Euro Area. 

Industrial production in the eurozone unexpectedly rose 0.5% in June from the upwardly revised flat reading in the previous month, the Eurostat reported Wednesday. 

In a separate report the statistical agency for the currency union confirmed that the economy expanded 0.3% in the second quarter from the previous quarter, matching the expectations set by some economists. 

The UK consumer price inflation slowed to 6.8% in July from 7.9% in June, following weaker energy prices, the Office for National Statistics reported Wednesday. 

Despite the weakening of the overall inflation, core inflation stayed at 6.9%, sending a signal to investors that the Bank of England may have to continue with its aggressive rate hike stance. 

 

Europe Indexes & Yields

The DAX index increased 0.2% to 15,802.60, the CAC-40 index rose 0.2% to 7,279.98 and the FTSE 100 index fell 0.5% to 7,357.73.  

The yield on German government bonds traded at a one-month high, lifting yields in the region for other nations as traders assessed inflation risks. 

The yield on 10-year German bonds decreased to 2.64%, French bonds traded lower to 3.19%, the UK gilts edged down to 4.60% and Italian bonds decreased to 4.30%.

The euro edged lower to $1.091, the British pound to $1.271 and the U.S. dollar fetched 88.06 Swiss cents.

Brent crude increased $0.25 to $85.28 a barrel and the Dutch TTF natural gas decreased €0.80 to €38.01 per MWh.

 

Stock Movers

Carlsberg AS declined 2.4% to DKK 996.80 despite the company slightly lifting its 2023 annual outlook. 

Alcon AG declined 1.1% to CHF 69.88 despite the Swiss eye-care firm reporting an increase in second quarter revenue and the company lifting its 2023 full-year outlook.

Mining companies extended losses for the second week in a row after China reported weak new home sales data today following weak retail sales, industrial production and unemployment data a day earlier. 

Anglo American declined and extended this year's loss to 39% and Glencore fell 0.1% and 23% respectively. 

Admiral Group Plc soared 5.8% to 2,327.0 pence after the insurance company reported a rise in first-half profit. 

Essentra PLC declined 0.9% to 154.40 pence after the plastics and fiber products maker said first-half revenue declined 5.5% from a year ago.