Euro Area Manufacturing Struggled In August, UK Home Prices Fell at Fastest Pace in 14 Years

Bridgette Randall
01 Sep, 2023
Frankfurt

European markets traded higher on the first day of September and final day of the week and investors reviewed economic news from the region, China and the U.S. 

Market indexes advanced in London, Paris and Frankfurt after a manufacturing survey showed a pick up in activities to the level last seen three months ago. 

The Eurozone manufacturing PMI increased to a three-month high of 43.50 points in August from 42.70 points in July, reported by S&P global. 

Germany's manufacturing weakness continued in August. 

The final factory PMI logged 39.1 in August, confirming the previous estimate and slightly above 38.8 in July.  

France's manufacturing accelerated its decline in new orders putting production and employment under pressure. 

The final PMI rose to 46.0 in August from 45.1 in July.

The overall numbers show ongoing weakness in the manufacturing industry and new orders declined in August and exports struggled and input costs continued to fall. 

In other economic news, U.K. home prices fell at the fastest pace in more than 14 years in August as rising borrowing costs negatively impacted housing market activity, the Nationwide Building Society report  highlighted.

Home prices posted an annual decline of 5.3% after easing from 3.8% in July, the decline was the largest fall since July 2009.

 

Europe Indexes & Yields

The DAX index decreased 0.1% to 15,926.96, the CAC-40 index rose 0.2% to 7,334.23 and the FTSE 100 index advanced 0.5% 7,475.25.

The yield on 10-year German bonds decreased to 2.47%, French bonds traded lower to 2.99%, the UK gilts edged down to 4.34% and Italian bonds fell to 4.12%.

The euro edged to the lowest level since mid-June on the hopes that the central is more likely to pause its rate hike campaign and assess the impact of the multiple rate hikes on the economy. 

The euro edged lower to $1.086, the British pound to $1.269 and the U.S. dollar fetched 88.09 Swiss cents.

Brent crude increased $1.0 to $87.83 a barrel and the Dutch TTF natural gas decreased €0.21 to €36.82 per MWh.

 

Europe Stock Movers

Salzgitter AG increased 0.6% to €27.36 despite the steelmaker dropping its fiscal year 2023 outlook for now. 

Electrolux AB declined 1.3% to kr 119.05 after the Swedish appliance maker recalled some models of Frigidaire gas cooktops to fix potential gas leaks. 

Johnson Matthey Plc soared 11% to 1,809.50 pence after the U.S. based investment company Standard Industries doubled its stake in the company to 10%. 

Aurubis AG declined 9.7% to €69.0 after the Germany-based copper smelter issued a profit warning. 

Camellia Plc declined 5% to 5,200.0 pence after the British agriculture engineering company reported its first-half results.