European Markets Advanced Ahead of the UK Budget Review

Bridgette Randall
22 Nov, 2023
Frankfurt

European markets advanced, and investors focused on the upcoming OPEC+ meeting this weekend.

Benchmark indexes in London, Paris, and Frankfurt headed higher after the U.S. Federal Reserve's early November meeting minutes showed policymakers are still looking for more signals for the sustained decline in inflation.

Moreover, most participants preferred to keep the monetary policy stance restrictive, despite the cooling of inflation, but economic growth is still stronger than expected and wages are still rising faster than needed to slow inflation down to 2%.

Brent crude oil price was steady ahead of the OPEC+ meeting this week, and traders are anticipating Saudi Arabia and Russia to extend voluntary production cuts again.

The UK's Chancellor of the Exchequer, Jeremy Hunt, is scheduled to deliver the 2023 Autumn Budget later today, reviewing the economic progress and the government's budgetary plan for the rest of the year.

Hunt is expected to cut national insurance for about 28 million people and save the government about £5 billion a year.

Those earning about £50,000 a year could face a higher insurance cost of one percent, or about £380 a year.

 

Europe Indexes and Yields

The DAX index increased 0.3% to 15,941.79, the CAC-40 index rose 0.3% to 7,246.18, and the FTSE 100 index fell 0.2% to 7,470.86.

The yield on 10-year German bonds increased to 2.58%; French bonds traded higher to 3.14%; the UK gilts increased to 4.14%; and Italian bonds inched higher to 4.33%.

The euro continued to rebound and approached the high last seen in late August after the U.S. rate hike worries receded.

The euro rebounded to $1.095, the British pound at $1.254, and the U.S. dollar at 88.42 Swiss cents.

Brent crude decreased $0.42 to $82.01 a barrel, and the Dutch TTF natural gas edged higher by €1.28 to €45.34 per MWh.

 

Europe Stock Movers

Sage Group jumped 11.1% to 1,114.0 pence after the UK-based software firm launched a stock repurchase plan and reported strong revenue growth in its latest fiscal year. 

Kingfisher plc declined 6.2% to 216.30 pence after the home improvement retailer lowered its profit outlook for the second time in three months.

Casino Guichard Perrachon SA decreased 0.3% to €0.81 after the grocery retailer estimated 2023 losses in its core French business.

ThyssenKrupp AG rose 6.7% to €7.07 after the German industrial engineering and steel company estimated profit in the fiscal year 2024.

The company reported a net loss of €2 billion in the fiscal year 2023.

Fresenius SE increased 0.4% to €27.71 after the dialysis service provider lifted its annual outlook.

The German company also said it had resolved its legal dispute with the U.S. government.