European Stocks and Bonds Traded In a Tight Range Ahead of a Busy Week of Earnings and Economic Data

Bridgette Randall
12 Feb, 2024
Frankfurt

European markets advanced in Monday's trading and attempted to extend gains from the previous week.

Market indexes in London, Paris, and Frankfurt gained quiet trading, and investors prepared for a busy week of corporate results and earnings releases.

Financial markets in Japan were closed to celebrate a public holiday and Greater China, South Korea, Malaysia, and Singapore were closed for the Lunar New Year.

Investors are looking ahead to the release of GDP estimates in the Euro Area and the UK and employment, retail sales, and inflation data in the UK.

European markets struggled in the previous week's trading, and investors lowered their rate-cut expectations, but worries about domestic retail sales and export growth overshadowed market sentiment.

Last week, economic data from the Federal Statistics Office in Germany showed factory orders declined 1.5% in 2023 from a year ago and exports fell 1.4% from a year ago amid weak global demand.

Germany, the largest economy in the Euro Area, contracted 0.3% in 2023, and the economic weakness is likely to persist in the first and second quarters of 2024.

Moreover, the German economy is likely to enter a technical recession as the high cost of living and elevated interest rates are negatively impacting consumer demand and small and medium-sized businesses, the backbone of the German economy.

Despite the market jitters of the last three weeks, benchmark indexes are trading near record highs, and corporate earnings are ahead of market expectations.

 

Europe Indexes and Yields

The DAX index increased 0.5% to 17,004.46, the CAC-40 index rose 0.6% to 7,690.85, and the FTSE 100 index inched lower by 0.1% to 7,565.23.

The yield on 10-year German bonds edged down to 2.34%; French bonds inched lower to 2.84%; the UK gilts edged lower to 4.04%; and Italian bonds inched higher to 3.90%.

The euro edged lower to $1.077, the British pound inched higher to $1.262, and the U.S. dollar gained to 87.50 Swiss cents.

Brent crude decreased $0.79 to $81.38 a barrel, and the Dutch TTF natural gas decreased by €0.84 to €28.28 per MWh.

 

Europe Stock Movers

Tod's SpA soared 18% to €42.92 after the LVMH-backed private equity group Catterton announced its plans to acquire a 36% stake in the Italian luxury fashion accessories maker.

Nordex SE increased 7.9% to €10.25 after the German wind turbine maker reported 2023 sales that surpassed its own estimate.

Consolidated revenue increased to €6.5 billion, exceeding its own target range between €5.6 billion and €6.1 billion.

Novo Nordisk A/S increased 0.3% to DKK 834.60 after the controlling shareholder in the company said it plans to invest up to $7 billion by 2030.

Tritax Big Box PLC decreased 2.5% to 156.0 pence after the UK-based real estate investment trust agreed to acquire UK Commercial Property REIT Ltd.

Tritax will exchange 0.444 of its own share for one share of UKCM.