European Markets Trade Sideways, French Trade Deficit Shrinks and UK Home Prices Rise Fourth Consecutive Month

Bridgette Randall
07 Feb, 2024
Frankfurt

European markets traded sideways as investors lowered hopes of rate cuts and reacted to another batch of corporate financial results.

Benchmark indexes in Frankfurt, London, and Paris struggled to gain traction after bond yields edged lower and the euro and the pound weakened.

Investors also reviewed January vehicle sales and passenger car sales in China, and sales faltered after the ending of government incentives.

 

China Vehicle Sales Plunged in January

Total vehicle sales, including exports, surged 47.9% from the previous year and dropped 22.7% from a year ago to 2.44 million units, according to a report from the China Association of Automobile Manufacturers.

Exports accounted for 18.2%, or 443,000 vehicles, and new energy vehicles soared 78.8% and accounted for 29.9% of total vehicle sales.

 

German Industrial Activities Shrank In 2023 

Closer to home, German industrial production fell 1.6% from the previous month in December, the fourth month of contraction in a row.

Industrial activity declined 1.8% in the fourth quarter and dropped 1.5% in 2023.

 

French Trade Deficit Shrank In 2023

France's trade deficit widened in December after imports rose at a faster pace than exports, a report from the customs office showed on Wednesday.

The trade deficit in December rose to €6.8 billion from €5.9 billion in November but fell sharply from €14.7 billion in the month a year ago.

For the entire year 2023, the trade deficit shrank to €99.6 billion from €162.6 billion in 2022, after exports advanced 1.5% and imports declined 7.1%.

 

UK Home Prices Rise Fourth Consecutive Month

UK home prices rose for the fourth month in a row, according to a survey conducted by Lloyds Bank subsidiary Halifax and S&P Global.

The Halifax House Price Index increased 2.5% from a year ago in January, from the upwardly revised 1.8% increase in December.

A typical UK home now costs £291,029, an increase of £3,900 from the last month.

The average house price in London decreased 0.4% from a year ago to £529,528, the highest across all regions in the UK.

“For those looking to buy a first home, the average deposit raised is now £53,414, around 19% of the purchase price. It’s not surprising that almost two-thirds (63%) of new buyers getting a foot on the ladder are now buying in joint names," said Kim Kinnaird, Director of Halifax Mortgages.

"Looking ahead, affordability challenges are likely to remain, and further modest falls should not be ruled out, against a backdrop of broader uncertainty in the economic environment," Kinnard added.

 

Europe Indexes and Yields

The DAX index decreased 0.2% to 17,002.44, the CAC-40 index rose 0.05% to 7,641.82, and the FTSE 100 index inched lower by 0.2% to 7,668.52.

The yield on 10-year German bonds edged down to 2.28%; French bonds inched lower to 2.79%; the UK gilts edged lower to 3.98%; and Italian bonds inched lower to 3.85%.

The euro edged lower to $1.076, the British pound inched higher to $1.263, and the U.S. dollar gained to 87.15 Swiss cents.

Brent crude increased $0.51 to $79.10 a barrel, and the Dutch TTF natural gas decreased by €0.28 to €28.33 per MWh.

 

Europe Stock Movers

Vestas Wind Systems soared 5.9% to DKK 199.30 after the Danish manufacturer of wind turbines swung to a full-year pre-tax profit on the back of strong gains in orders.

Pandora declined 1% to DKK 1,019.50, and the fashion jewelry retailer announced a stock repurchase plan.

TotalEnergies SE declined 2.5% to €58.77 after the French energy company reported lower-than-expected adjusted earnings per share.

TeamViewer SE jumped 4.5% to €14.37 after the German software company reported higher-than-expected sales in the fourth quarter.