Consumer Confidence Remains Weak In Germany and France; UK Retail Inflation Eases

Bridgette Randall
27 Feb, 2024
Frankfurt

European markets struggled to extend gains as investors reviewed the latest update on consumer confidence in Germany and France. 

The forward-looking consumer confidence indicator improved slightly in March as consumers battled high prices and weak economic conditions persisted. 

The GfK Consumer Climate Indicator for Germany improved to 29.0 in March from an 11-month low of 2.6 in February, said the survey company GfK Group. 

However, France's consumer confidence declined unexpectedly in February, the statistical agency INSEE reported Tuesday. 

The consumer sentiment index decreased to 89 from 91 in January as more consumers were pessimistic about the outlook for their standard of living and their financial situation. 

Also, more consumers worried about the inflation outlook and losing their jobs and felt now was not the best time to make a major purchase. 

 

Eurozone Overall Private Sector Credit Growth Stalled

Elsewhere in the eurozone, bank lending to households increased by 0.3% to €6.87 trillion, the slowest pace of increase since March 2015, the European Central Bank reported Tuesday. 

Moreover, lending to non-financial corporations increased by 0.2% in January, following an upwardly revised 0.5% rise in December. 

The overall private sector credit growth, including corporations and households, increased by 0.4%, matching the rate in the previous month. 

 

UK Retail Price Inflation Eased 

Separately, the UK's retail trade association said retail price inflation dropped to a near two-year low in February. 

The retail shop price index increased 2.5% from a year ago in February, slower than 2.9% in January, and the lowest since March 2022, the British Retail Consortium reported Tuesday. 

 

Europe Indexes and Yields

The DAX index increased by 0.5% to 17,503.79, the CAC-40 index was nearly unchanged at 7,929.66, and the FTSE 100 index inched higher by 0.03% to 7,686.67.

The yield on 10-year German bonds edged up to 2.41%; French bonds inched higher to 2.89%; the UK gilts edged lower to 4.13%; and Italian bonds inched lower to 3.87%.

The euro edged higher to $1.085, the British pound inched higher to $1.268, and the U.S. dollar gained to 87.99 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 $0.11 to $82.41 a barrel, and the Dutch TTF natural gas increased by €0.74 to €23.27 per MWh.

 

Europe Stock Movers

SEB SA declined 6% to €107.0 after Peugeot Invest sold its stake in the consumer appliance maker. 

Abrdn PLC declined 1.8% to 158.65 pence after the company narrowed its full-year losses and announced its plan to cut 500 jobs as part of its cost reduction program. 

Smith & Nephew increased 1.2% to 1,139.50 pence after the company reported improving financial results in the fourth quarter and in full-year 2023. 

Casino Guichard Perrachon soared 29% to €0.68 after a French court approved the company's restructuring plan. 

Bouygues SA advanced 5.9% to €35.98 after the diversified construction conglomerate reported core annual profit ahead of its own target.