European Retail Sales Declined, Germany Factory Orders Plunged

Bridgette Randall
06 Sep, 2023
Frankfurt

European markets remained under pressure on the ongoing economic slowdown worries. 

Market indexes in Paris, London and Frankfurt declined and traded near one-month lows amid new economic data highlighting growth struggles. 

The Euro Area retail sales decreased 1% from a year ago and eased 0.2% from the previous month in July, Eurostat reported Wednesday. 

Retail sales declined for the tenth month in a row, and fuel sales fell 1.2% on higher prices impacting overall sales. 

Factory orders in Germany dropped 11.7% from the previous month in July and orders were revised higher to an increase of 7.6% in June, the Federal Statistics Office or Destatis said Wednesday. 

Factory orders are dominated by large scale orders for transportation and capital goods and tend to be volatile.

Orders declined for the first time since March largely because of a decline in transportation orders. 

 

Europe Indexes & Yields

European markets have been on the decline for the last five weeks on the worries of economic slowdown and higher interest rates that could dip the economy into a deeper recession. 

The DAX index decreased 0.3% to 15,771.71, the CAC-40 index was unchanged at 7,254.72 and the FTSE 100 index fell 0.6% to 7,393.29.

The yield on 10-year German bonds increased to 2.61%, French bonds traded higher to 3.14%, the UK gilts edged up to 4.51% and Italian bonds rose to 4.33%.

The euro edged to the lowest level since mid-June on the hopes that the central bank 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 $1.076, the British pound to $1.253 and the U.S. dollar fetched 89.20 Swiss cents.

Brent crude decreased $0.62 to $89.61 a barrel and the Dutch TTF natural gas declined €0.35 to €34.10 per MWh.

 

Europe Stock Movers

Energy traded higher after crude oil prices edged up after Saudi Arabia and Russia extended voluntary production cuts to the year's end.

BP Plc, TotalEnergies SE and Eni SpA gained between 0.2% and 1%. 

Resource stocks traded down on the worries about the uneven economic recovery in China.

Antofagasta, Glencore and Anglo American declined around 1%. 

Luxury stocks in Paris were unchanged and traded near their one-week lows as China economic growth woes were in focus in global trading. 

LVMH, Hermes and Kering traded in a tight range with a downward bias. 

WH Smith Plc dropped 7% to 1,380.0 pence after the company reiterated its annual outlook in its investor update. 

InPost SA soared 10% to €10.72 after the Polish parcel locker company reported higher second quarter results. 

Idorsia Ltd. fell 8.1% to CHF 5.01 after the company revised its pact with Janssen Biotech Inc., a Johnson & Johnson affiliate, for the return of rights for aprocitentan. 

In return, Idorsia will pay up to CHF 306 million, subject to marketing application approval by the US drug regulator and the EMA in Europe.