European Markets Rest as Investors Review Earnings, Bond Yields Rebound to 2-month High

Bridgette Randall
09 Feb, 2024
Frankfurt

European markets traded in a tight range after a busy week of earnings and economic updates.

Benchmark indexes in Frankfurt, Paris, and London edged higher in Friday's trading, and bond yields hovered near a 2-month high after investors unwound expectations of an imminent rate cut in the U.S. and the Euro Area.

Crude oil traded volatile amid elevated tensions in the Middle East after a week ago the US and UK struck down several targets controlled by groups allied with Iran.

On the earnings front, L'Oreal, Hermes, Orange, Tesco, and Carl Zeiss Meditec were in focus after the companies released their earnings.

 

German Inflation Confirmed at a 30-month Low

Germany's consumer price inflation in January was confirmed at 2.9%, the Federal Statistics Office or Destatis, reported Friday. 

Overall inflation in January eased from 3.7% in December, and matched the initial estimate released on January 31.

Inflation declined to the lowest level since June 2021, when prices rose 2.4%.

 

Europe Indexes and Yields

The DAX index increased 0.05% to 16,973.47, the CAC-40 index fell 0.2% to 7,653.92, and the FTSE 100 index inched higher by 0.1% to 7,605.52.

The yield on 10-year German bonds edged up to 2.35%; French bonds inched higher to 2.86%; the UK gilts edged higher to 4.05%; and Italian bonds inched higher to 3.93%.

The euro edged lower to $1.076, the British pound inched higher to $1.260, and the U.S. dollar gained to 87.55 Swiss cents.

Brent crude decreased $0.10 to $81.52 a barrel, and the Dutch TTF natural gas decreased by €0.50 to €27.52 per MWh.

 

Europe Stock Movers

Tesco PLC rose 1% to 283.30 pence after the UK-based grocery retailer said it agreed to sell its banking and financial services operation to Barclays.

Hermes SCA jumped 4.4% to €2,166.50 after the luxury fashion accessories retailer reported fourth-quarter sales surged 17.5% and announced plans to raise prices.

L'Oreal decreased 5.7% to €427.05 after the French personal care product maker reported lower-than-expected fourth-quarter sales.

Orange SA declined 0.1% to €10.58 after the French wireless telecom carrier swung to a pre-tax loss of 2.2 million in 2023 from a profit of 81.6 million a year ago.