European Indexes Hover Below Record Highs, Bond Yields Advanced, Natural Gas Prices Drop to 8-month Low

Bridgette Randall
19 Feb, 2024
Frankfurt

 European markets retreated in Monday's trading from record high levels on Friday as investors debated the future rate path. 

Benchmark indexes in France and Germany traded down from record highs in Friday's trading amid a busy week of economic data releases and minutes of meetings from the European Central Bank and the Federal Reserve. 

In Europe, investors are looking ahead to the GDP update from Germany, manufacturing and service sector surveys, and the final inflation reading in the eurozone.

Moreover, international trade data from Switzerland and Spain is scheduled to be released this week.

European markets trading in Monday's trading is expected to be subdued, and financial markets in the U.S. are closed to celebrate President's Day. 

Closer to home, the annual rate of inflation in Sweden in January accelerated to 5.4% from a 22-month low of 4.4% in the previous month, Statistics Sweden reported Monday. 

Inflation picked up largely because of a surge in housing rents and higher mortgage and utility costs. 

Despite the weak macroeconomic backdrop in the eurozone, corporate earnings so far have been ahead of market expectations, driving benchmark indexes to record highs. 

Investors also welcomed the latest update from China, indicating that tourism spending during the weeklong Lunar New Year holiday surpassed the pre-pandemic 2019 level. 

 

Europe Indexes and Yields

The DAX index increased by 0.4% to 17,056.02, the CAC-40 index fell 0.4% to 7,733.84, and the FTSE 100 index inched higher by 0.06% to 7,616.25.

The yield on 10-year German bonds edged up to 2.39%; French bonds inched higher to 2.82%; the UK gilts edged higher to 4.10%; and Italian bonds inched higher to 3.86%.

The euro edged higher to $1.077, the British pound inched higher to $1.261, and the U.S. dollar gained to 88.07 Swiss cents.

Brent crude decreased $0.70 to $82.76 a barrel, and the Dutch TTF natural gas decreased by €0.60 to €24.22 per MWh.

The natural gas prices continued to drift lower after peaking on October 13 above €53 per MWh on elevated storage in Germany, France, and Italy and the resumption of supplies from Norway. 

European Union natural gas reserves are at a 13-year high of 65.4% for the current period, and with signs of near-term cold weather, demand for natural gas is expected to stay below normal for the next few weeks. 

 

Europe Stock Movers

Forvia SE edged down 1.5% to €15.83 after the French automotive component maker reported quarterly results and estimated higher sales in 2024. 

Temenos soared 7.2% to CHF 64.94 and rebounded after the Swiss software company's stock plunged more than 20% in Friday's trading after U.S.-based activist investor Hindenburg Research said it was shorting the stock. 

Temenos is scheduled to release its financial statements after the close on Monday, and the company reiterated that its financial performance is in line with the preliminary results announced on January 19. 

Nnit AS rose 3% to kr. 107.0, and the Danish life science information technology company is scheduled to release its annual earnings after the close of its regular trading session.