European Bond Yields Edge Higher, Spain Producer Price Extends Decline to 11th Month

Bridgette Randall
26 Feb, 2024
Frankfurt

European markets rested in quiet trading in Monday's trading, and investors looked ahead to the release of economic data. 

This week, inflation and employment data are set to be released for the eurozone; GDP data in Italy; retail sales in Switzerland; and home price updates in the UK are also anticipated.

Germany, France, and Spain are set to release their inflation reports on Thursday. 

Moreover, investors are looking forward to comments from European Central Bank President Christine Lagarde. 

Market indexes hovered around their highs in France and Germany, and investors lowered rate-cut expectations in the near term.

The euro advanced after the European Central Bank's Yannis Stournaras ruled out the possibility of rate cuts in March.

In Asia, the Nikkei index closed at a new record high, but benchmark indexes in Shanghai and Hong Kong fell for the second day on the protracted property market downturn and persistent selling by foreign investors. 

Market indexes in Mumbai closed down, but indexes hovered near record highs as investors reviewed a mixed batch of earnings results released last week. 

 

Producer Prices In Spain Extended Decline to 11th Month 

Spain's producer prices declined 3.8% from a year ago in January, the National Statistics Institute, or INE, reported Monday. 

The measure of wholesale prices declined for the eleventh month in a row and extended the 6.3% decline in the previous month. 

The energy price decline eased to 12.6% from 20.6%, and intermediate goods prices fell 5.7% after easing 4.9% in the previous month, respectively. 

Producer prices, excluding energy prices, rose 0.2% in January, compared to a 0.3% decline in December.  

 

Europe Indexes and Yields

The DAX index increased by 0.05% to 17,428.20, the CAC-40 index fell 0.4% to 7,933.15, and the FTSE 100 index inched lower by 0.4% to 7,681.13.

In the week, the DAX increased 1.7%, the CAC-40 index advanced 2.6%, and the FTSE 100 index decreased 0.4%. 

The yield on 10-year German bonds edged up to 2.37%; French bonds inched higher to 2.83%; the UK gilts edged lower to 4.09%; and Italian bonds inched higher to 3.81%.

The euro edged higher to $1.084, the British pound inched higher to $1.264, and the U.S. dollar gained to 87.93 Swiss cents.

The natural gas price in Europe dropped 8% last week and approached the pre-Ukraine war crisis level of May 2021. 

Brent crude decreased $0.42 to $81.20 a barrel, and the Dutch TTF natural gas increased by €0.52 to €23.45 per MWh.

 

Europe Stock Movers

Pagero Group AB declined 0.2% to SEK 49.60 after Thomson Reuters Corp. announced the acquisition of the company for $800 million of 8.1 billion Swedish kronor. 

Ryanair Holdings gained as much as 1% before easing 0.9% to €20.42 on local reports that the Ireland-based discount airline may increase peak summer air fares by as much as 10%. 

Stellantis NV decreased 1.9% to €24.13, and the vehicle maker announced a deal with leasing and fleet management company Ayvens for 500,000 by 2026. 

Persimmon declined 3.7% to 1,359.75 pence, Barratt Developments fell 1.7% to 470.20 pence, and Taylor Wimpey dropped 3.7% to 140.53 pence after the antitrust regulator opened an investigation into the sector.