European Markets Struggled to Advance Ahead of Inflation and Jobs Data

Bridgette Randall
27 Nov, 2023
Frankfurt

European market indexes traded lower in Monday's trading, and investors looked ahead to the release of jobs and inflation data in the region later in the week.

Benchmark indexes in Frankfurt, Paris, and London declined following the increases in the previous two weeks in a row.

In the European Union, this week economists are awaiting the release of inflation and job data from the Euro Area, Germany, France, and Italy.

The euro hovered at its two-month high against the U.S. dollar, and the yields on bonds in the region traded at three-month highs.

Market sentiment in European stock trading has been driven by the expectation that European Central Bank policymakers are done raising interest rates for now.

Moreover, the steady decline in inflation in the last eight months has fueled expectations that interest rates may not have to be raised to bring down inflation to the central bank's target rate of 2%.

However, the cooling of inflation is contrasted by the fact that despite the multiple interest rate hikes, inflation is still significantly above the target rate, and the central bank may have to keep rates higher well into 2024.

 

Europe Indexes and Yields

The DAX index decreased 0.2% to 15,994.35, the CAC-40 index fell 0.1% to 7,284.72, and the FTSE 100 index declined 0.1% to 7,477.72.

In the week, the DAX index increased 0.8%, the CAC-40 index rose 0.7%, and the FTSE 100 index declined 0.4%.

The yield on 10-year German bonds decreased to 2.62%; French bonds traded lower to 3.17%; the UK gilts declined to 4.26%; and Italian bonds inched lower to 4.35%.

The euro rebounded to $1.095, the British pound at $1.261, and the U.S. dollar at 88.05 Swiss cents.

Brent crude increased $1.34 to $79.23 a barrel, and the Dutch TTF natural gas declined by €2.46 to €44.16 per MWh.

 

Europe Stock Movers

Julius Baer Group declined 2% to CHF 45.82 after the Swiss bank disclosed a CHF 70 million charge against a loan in its private loan business.

The bank said the nominal exposure of CHF 606 million is comprised of three loans to one "European conglomerate" linked to commercial real estate and luxury retail and "is now subject to long-term restructuring."

Veolia Environnement SA rose 0.5% to €28.36 after the French water, waste, and renewable energy management solution provider agreed to sell its SADE-CGTH to NGE for €260 million.

SADE provides civil engineering works and network construction, mainly in the water sector. It generated 2022 revenue of around €1.1 billion and employed around 6,900 people.

Valneva SE rose 1.6% to €5.29 after the French drug maker's application for chikungunya vaccine candidate VLA1553 was accepted by the European Medicines Agency. 

Sanofi SA added 1.3% to €87.52 after the French drug company announced positive results for its experimental drug Dupixent (dupilumab) Phase 3 trial in chronic obstructive pulmonary disease, or "smoker's lung."

The second large trial showed improvement in exacerbations of the disease by 34%, confirming the findings in the first trial earlier in the year known as BOREAS.

After the positive results, the company and Regeneron are looking to file an accelerated application with the U.S. Food and Drug Administration before the end of the year, following promising results.

Aviva plc added 0.07% to 425.0 pence after the UK-based insurance company agreed to acquire Canada-based vehicle replacement insurance company Otiom O2 Holdings Inc. for about £100 million.

Rightmove Plc jumped 5.7% to 538.0 pence after the real estate listing portal reported better-than-expected revenue and the company lifted its 2023 revenue outlook.

"The acquisition expands Aviva’s capital-light businesses, which make up over half of Aviva’s portfolio, and grows Aviva Canada’s presence in a profitable segment of the Canadian insurance market," said the company in a statement to investors.