European Markets Rest Ahead of Rate Decisions, Natural Gas Drops to 2-month Low

Bridgette Randall
11 Dec, 2023
Frankfurt

Stocks lacked direction in trading across Europe, and investors awaited rate decisions from several central banks.

Market indexes rested after extending their gains for the third week in a row in the hopes that the European Central Bank is done raising rates for now.

The DAX index in Frankfurt touched a new high last week before edging lower in Friday's trading.

Moreover, stronger-than-expected U.S. job additions in November also raised hopes that the Federal Reserve will have more room to maneuver the economy to a soft landing while cooling inflation to its target rate of 2%.

Closer-to-home investors are awaiting interest rate decisions this week from the European Central Bank, the Bank of England, Norges Bank, and the Swiss National Bank.

The U.S. Federal Reserve, the ECB, the BoE, and the SNB are expected to leave rates unchanged.

Investors are looking forward to inflation, retail sales, and factory orders reports in the U.S., the Euro Area trade balance, and China’s industrial production, retail sales, and housing prices later in the week.

 

Europe Indexes and Yields

The DAX index decreased 0.02% to 16,756.07, the CAC-40 index rose 0.08% to 7,532.69, and the FTSE 100 index fell 0.3% to 7,532.22.

In the previous week, the DAX index advanced 1.6%, the CAC-40 index gained 2.2%, and the FTSE 100 index gained 0.2%.

The yield on 10-year German bonds increased to 2.25%; French bonds traded higher to 2.81%; the UK gilts rose to 4.04%; and Italian bonds inched higher to 4.06%.

The euro traded lower to $1.076, the British pound inched lower to $1.255, and the U.S. dollar eased to 87.96 Swiss cents.

Brent crude increased $0.45 to $75.36 a barrel, and the Dutch TTF natural gas increased by €1.85 to €36.75 per MWh.

 

Europe Stock Movers

Mining stocks traded mixed after China's consumer prices fell at the fastest pace in November and the U.S. dollar continued to drift lower against the euro and the pound.

Glencore declined 3.3% to 442.05 pence, Antofagasta increased 1.2% to 1,532.50 pence, and Anglo American gained 1.6% to 1,831.60 pence.

Encavis AG decreased 7.5% to €13.64 after the German renewable energy producer was downgraded to "underweight" from "equal-weight" by Morgan Stanley.

Schibsted ASA jumped 6.2% to €24.20 after the Norwegian company agreed to sell its news operations to Tinius Trust.

The total transaction value in the agreement is NOK 6.2 billion, consisting of NOK 5.4 billion for Schibsted’s News Media business area, Schibsted’s minority stakes in Norsk Telegrambyrå AS, Nyhetsbyrån AB, and Lokalavisene AS, and the stake in Polaris valued at NOK 0.8 billion based on the volume-weighted average price of Polaris the week prior to the agreement.

The company plans to use the proceeds of sales to return to shareholders.

Sandvik AB jumped 0.9% to kr213.0 after the company won an order worth 250 Swedish kronor from the Swedish mining company LKAB to supply automated loaders.

Domino's Pizza Group eased 0.1% to 393.20 pence after the pizza delivery company reiterated its fiscal year 2023 guidance.

Casino Guichard Perrachon SA increased 0.1% to €0.72 after the company said that Group Calleja has initiated the process in Colombia of acquiring the company's stake in Almacenes Exito S.A.

MorphoSys AG soared 9.2% to €27.06 after the German company announced positive results from a Phase III myelofibrosis trial.

Basilea Pharmaceutica AG added 5% to CHF 36.50 after the Swiss company's license partner Astellas Pharma received approval from the U.S. Food and Drug Administration to expand the use of the antifungal Cresemba (isavuconazole) in children with invasive aspergillosis and invasive mucormycosis.