Eurozone Inflation Slowed and GDP Contracted In the Third Quarter

Bridgette Randall
31 Oct, 2023
Frankfurt

European market indexes rebounded after inflation in the eurozone, France, and the Netherlands declined.

Benchmark indexes in Frankfurt, Paris, and London advanced more than 0.5%, and bond yields decreased after inflation measures eased.

 

Eurozone Inflation Slowed

The consumer price index in the eurozone eased to 2.9% in October, the lowest since July 2021, Eurostat reported Tuesday.

The core rate of inflation in the currency union, which excludes volatile energy and food prices, also slowed to 4.2%, the lowest since July 2022.

 

Eurozone Q3 GDP Contracted

The Euro Area economy contracted 0.1% on the quarter in the three months to September, following an upwardly revised 0.2% increase in the second quarter, the statistical agency reported in a separate report.

On an annual basis, the economy barely expanded by 0.1%, the weakest economic growth since the decline in 2021.

 

French Economy Barely Expanded 

The French economy barely expanded 0.1% on the quarter in the third quarter, following an upwardly revised 0.6% increase in the second quarter, the statistical agency INSEE reported Tuesday.

On an annual basis, the economy expanded by 0.7% in the third quarter, slower than the upwardly revised 1.2% growth in the second quarter.

Italian GDP stalled in the third quarter from the previous quarter, following the 0.4% contraction in the second quarter, the Italian statistical agency ISTAT reported Tuesday.

 

Europe Indexes and Yields

The DAX index increased 0.6% to 14,805.80, the CAC-40 index advanced 0.9% to 6,888.56, and the FTSE 100 index edged higher by 0.5% to 7,363.12.

The yield on 10-yetrar German bonds decreased to 2.78%, French bonds traded lower to 3.39%, the UK gilts edged up to 4.49%, and Italian bonds inched higher to 4.69%.

The euro hovered near a three-month low at $1.066, the British pound at $1.219, and the U.S. dollar at 90.18 Swiss cents.

Brent crude decreased $0.68 to $87.02 a barrel, and the Dutch TTF natural gas edged higher by €0.35 to €50.17 per MWh.

 

Europe Stock Movers

Anheuser-Busch Inbev SA jumped 3.9% to €52.86 after the company reported higher-than-expected sales growth in the third quarter.

Carlsberg A/S Class B declined 1.3% to €111.90 after the brewery warned of weak consumer sentiment in Europe and Southeast Asia.

BP Plc decreased 4.0% to 505.70 pence after the U.K.-based energy company reported a sharp decline in quarterly profit and smaller-than-expected results from its gas trading operation.

Last week, Exxon Mobil and Chevron also reported a sharp decline in quarterly revenue and profit, reflecting lower crude oil and natural gas prices from a year ago.

BBVA SA declined 1.1% to €7.42 despite the Spanish bank reporting strong third-quarter earnings.

Wartsila Oyj Abp soared 16.2% to €11.32 after the power engineering company reported improved profitability in the third quarter.

Spectris Plc advanced 4% to 3,127.0 pence after the precision instrumentation and control company said 2023 revenue is expected to be near the top end of previous guidance.

Thales SA declined 2.6% to €137.35 after the French defense electronics contractor said new order inflow in the nine-month period ending in September declined 18% from a year ago.

Order intake in the period declined to €12.4 billion from €15.5 billion, a decrease of 20% in nominal terms and 18% on an organic basis from a year ago.

In the nine-month period, sales increased 4.5% to €12.8 billion, and in the third quarter, sales rose 2.4% to €4.1 billion.

The company reiterated full-year 2023 organic sales growth between 5% and 7%, or between €17.9 billion and €18.2 billion.

Elementis plc gained 4.9% to 118.0 pence, despite the chemical company reporting a decline in revenue in the third quarter.

BASF SE increased 4.2% to €43.39 after the German chemical company announced its plan to cut investment and reduce its operating costs.

Siemens Energy AG declined 2.4% to €8.23 after the company said it plans to sell its India-listed Siemens Ltd. to its former parent, Siemens AG.

Uniper SE jumped 7.3% to €4.74 after the German utility company swung to a nine-month profit of €9.8 billion.

Bouygues SA increased 4.4% to €33.16 after the diversified French conglomerate reported strong nine-month results and reiterated its financial year 2023 outlook.