Eurozone Current Account Swings to Surplus, EU Passenger Car Sales Rebound

Bridgette Randall
20 Feb, 2024
New York City

European markets traded mixed as investors overlooked interest rate uncertainties and shifted their focus to another batch of earnings. 

Benchmark indexes in Germany edged lower, but in Paris and London they advanced. 

Market indexes in Paris and Frankfurt hovered near record highs, but anxious investors awaited the release of the latest policy meeting minutes. 

 

Eurozone Current Account Swings to Surplus in 2023

The Eurozone current account surplus rose to a six-month high in December, the European Central Bank reported Tuesday. 

The current account surplus rose to €32 billion from €22 billion in the previous month, the highest level since last June. 

The goods surplus in the month rose to €35 billion from €32 billion, and the service surplus eased to €16 billion from €17 billion a year ago. 

The primary income shortfall in the month declined to €5 billion from €13 billion, and the secondary income shortfall decreased to €13 billion from €14 billion a year ago. 

In the full-year 2023, the current account surplus increased to €260 billion, or 1.8% of the eurozone GDP, from a deficit of €82 billion, or 0.6% of GDP, in 2022.

 

EU Passenger Car Registration Jumped In January 

Passenger car registration in the European Union rose 12.1% from a year ago in January to 851,700 units, the European Automobile Manufacturers Association reported Tuesday. 

Despite higher interest rates and rising costs of living, buyers returned to acquire new vehicles. 

Among major markets in the region, passenger car registrations in Germany soared 19.1%, followed by Italy with an increase of 10.6%, France 9.2%, and Spain 7.3%. 

Battery electric vehicle sales rebounded 28.9% to 92,700 units, comprising 10.9% of all registrations and rebounding from a 16.9% decline in December. 

In January, the petrol car market expanded by 4%, driven by an increase of 26.7% in Italy and a 16.9% rise in Germany. 

Despite maintaining its lead with 35.2% of the market in January, the share of gasoline cars decreased from 37.9% in the same month in 2023.

Diesel car registration continued to shrink as buyers opted for hybrids or other models of passenger cars. 

The EU diesel car market shrank by 4.9% in January, with a decline of 23.4% in France, 10.2% in Spain, and 8.7% in Italy. 

However, Germany diverged from this trend with an increase of 4.3%. 

In January, diesel car registrations were 114,415 units, shrinking its market share to 13.4% from 15.8% in the month a year ago.

 

Europe Indexes and Yields

The DAX index decreased by 0.2% to 17,057.49, the CAC-40 index rose 0.3% to 7,792.92, and the FTSE 100 index inched higher by 0.04% to 7,731.61.

The yield on 10-year German bonds edged down to 2.37%; French bonds inched higher to 2.84%; the UK gilts edged lower to 4.05%; and Italian bonds inched higher to 3.86%.

The euro edged higher to $1.08, the British pound inched higher to $1.263, and the U.S. dollar gained to 88.06 Swiss cents.

Brent crude decreased $0.43 to $83.09 a barrel, and the Dutch TTF natural gas increased by €0.19 to €23.89 per MWh.

 

Europe Stock Movers

Barclays PLC increased 5.7% to 157.50 pence after the UK-based bank reported weak quarterly results. 

Total revenue in the fourth quarter declined 3% to £5.6 billion from £5.8 billion, and net income attributable to shareholders swung to a loss of £111 million from a profit of £1.04 billion a year ago. 

The financial services company also said it plans to return £10 billion to shareholders between 2024 and 2026 through stock buybacks and dividends. 

Fresenius Medical Care decreased 0.3% to €26.51 despite the Germany dialysis firm reporting stronger-than-expected fourth quarter results. 

Revenue in the fourth quarter was flat at €4.98 billion, net income advanced to €188 million from €139 million, and basic earnings per share jumped 35% to 64 cents from 47 cents a year ago. 

The company estimated 2024 revenue growth at "a low- to mid-single-digit percent rate" and operating income at a "mid- to high-teen percent rate" compared to a year ago, respectively.