Eurozone Inflation Eased In November, German Jobless Rate Inched Higher

Bridgette Randall
30 Nov, 2023
Frankfurt

European markets edged higher after investors digested the latest inflation report in the eurozone.

Bond yields in the euro area decreased after consumer price inflation in the eurozone slowed to 2.4% in November, largely because of the higher comparison base in the previous year.

The latest inflation report confirmed the declining inflation trend, and Spain's inflation eased to 3.2% in November from 3.5%, while Germany's import price inflation declined for the eighth month in a row and fell 13% in November.

Despite the cooling inflation trend, market participants remained nervous after the U.S. GDP growth estimate in the third quarter was revised higher to 5.2% from the previous estimate of 4.9%, stoking fears that the Federal Reserve may consider keeping higher rates for longer in 2024. 

Bond yields eased to new three-month lows, and the euro hovered near its two-month high against the U.S. dollar.

 

German Jobless Rate Increased In November.

Moreover, Germany's seasonally adjusted jobless rate rose to 5.9% in November from 5.8% in the previous month, the Federal Employment Agency reported Thursday.

The unemployment rate rose to the highest level since May 2021, after the number of job seekers increased by 22,000 to 2.702 million.

The number of unemployed rose by 175,000, but the number of job openings declined by 90,000 from a year ago.

 

Eurozone Inflation Eased in November

The consumer price inflation rate in the Euro Area declined to 2.4% from a year ago in November, Eurostat reported Thursday.

Overall inflation declined to the lowest level since July 2021 and eased from 2.9% in October, reflecting weakening energy prices from a year ago.

Meanwhile, the core rate of inflation, which excludes volatile energy and food prices, declined to 3.6% from 4.2% in the previous month, the lowest since April 2022.

Energy prices dropped at a faster pace of 11.5% compared to 11.2% in October; food, alcohol, and tobacco inflation slowed to 6.9% from 7.4%; service inflation eased to 4.0% from 4.6%; and non-energy industrial goods inflation inched lower to 2.9% from 3.5%.

 

Europe Indexes and Yields

The DAX index increased 0.2% to 16,196.88, the CAC-40 index rose 0.2% to 7,278.54, and the FTSE 100 index added 0.5% to 7,459.54.

The yield on 10-year German bonds decreased to 2.41%; French bonds traded lower to 3.0%; the UK gilts declined to 4.14%; and Italian bonds inched higher to 4.19%.

The euro held at $1.091, the British pound inched lower to $1.264, and the U.S. dollar eased to 87.47 Swiss cents.

Brent crude increased $0.87 to $83.75 a barrel, and the Dutch TTF natural gas increased by €1.54 to €41.96 per MWh.

 

Europe Stock Movers

Mining stocks advanced, tracking higher commodity prices.

Glencore jumped 1.1% to 448.90 pence, Anglo American edged up a fraction to 2,145.20 pence, and Antofagasta rose 0.1% to 1,419.50 pence.

Energy stocks gained in London trading as OPEC+ members meet to discuss production quotas and support higher prices in international markets.

BP gained 2.4% to 485.74 pence, Shell advanced 1.2% to 2,584.50 pence, Repsol inched higher 1.4% to €14.23, and TotalEnergies jumped 1.6% to €62.79.

Banks traded higher after rate hike worries following the easing of inflation in the currency union.

Banco Santander rose 1.0% to €3.84, Deutsche Bank gained 2.1% to €11.50, UniCredit eased 0.2% to €25.26, Barclays added 0.3% to 140.84 pence, and HSBC advanced 0.8% to 599.50 pence.

German industrial engineering and vehicle makers were in focus after the jobless rate eased in November.

Volkswagen Group decreased 0.8% to €105.98, BMW gained 0.1% to €96.18, and Mercedes-Benz Group eased 0.01% to €59.28.

Siemens gained 0.5% to €153.64, ThyssenKrupp eased 1% to €6.95, and MTU Aero Engines decreased 0.6% to €186.65.