European Markets Rest Near Record Peaks Ahead of Rate Decisions

Bridgette Randall
04 Mar, 2024
Frankfurt

European markets hovered near record highs as investors digested a flood of inflation data last week and awaited more clarity from central bankers. 

The European Central Bank is set to announce its monetary decision on Wednesday, and the central bank is widely anticipated to keep rates steady but may clarify the rate path ahead. 

Last week, inflation eased in the eurozone, Germany, France, and Spain but stayed above the 2% target set by the European Central Bank.

Retail sales in Germany decreased, and the jobless rate edged up to 5.9%, but payrolls in France held steady in the fourth quarter.

Swiss GDP growth slowed for the third year in a row to 0.8% in 2023, and UK home prices rose in February after falling in the previous eleven months in a row. 

Swill annual inflation rate eased to 1.2% in February from 1.3% in January, the lowest level since October 2021, the Swiss Federal Statistical Office reported Monday. 

Core inflation rate, which excludes fresh food and energy,  in the month eased to 1.1% from 1.2% in the previous month. 

Investors are also looking forward to the release of fourth-quarter GDP in the eurozone and international trade data for France and Germany.

In addition, retail sales in the eurozone are expected to rebound in January after falling at the fastest pace in one year in December. 

 

Europe Indexes and Yields

The DAX index increased by 0.05% to 17,786.77, the CAC-40 index gained a fraction to 7,934.74, and the FTSE 100 index inched lower by 0.3% to 7,658.12.

For the week, the DAX index advanced 1.8%, the CAC 40 decreased 0.4%, and the FTSE 100 index dropped 0.5%. 

The yield on 10-year German bonds edged down to 2.38%; French bonds inched lower to 2.86%; the UK gilts edged lower to 4.09%; and Italian bonds inched lower to 3.84%.

The euro edged higher to $1.085, the British pound inched higher to $1.267, and the U.S. dollar weakened to 88.32 Swiss cents.

Brent crude decreased $0.11 to $83.45 a barrel, and the Dutch TTF natural gas increased by €0.60 to €25.21 per MWh.

 

Europe Stock Movers

BNP Paribas increased 1.7% to €57.03 after the financial services company launched a €1.055 billion stock repurchase plan. 

Evonik Industries inched up 0.3% to €17.22 after the German chemical company announced plans to cut 2,000 jobs around the world by 2026 to streamline costs. 

The company offered a muted business outlook in 2024. 

Aviva decreased 0.1% to 447.20 pence after the insurance company agreed to acquire underwriting syndicate Probitas for £242 million. 

Henkel declined 4.8% to €67.04 after the chemical and German consumer products company estimated slower organic sales growth between 2% and 4% in the current year. 

Delivery Hero added 0.9% to €67.04 after the online food ordering and delivery company announced it extended its €1.1 billion loan facility by two years to August 2029 and raised a new debt of €500 million to repurchase convertible bonds and cover general corporate expenses. 

The company also reiterated the previously announced growth in gross market volume between 7% and 9% in constant currency.