German Factory Orders Plunged, Nationwide Building Society Agreed to Buy Virgin Money

Bridgette Randall
07 Mar, 2024
Frankfurt

European markets lacked direction, and investors awaited monetary policy decisions from the European Central Bank and comments from President Christine Lagarde later in the day. 

Benchmark indexes in Frankfurt, Paris, and London lacked direction in subdued trading as investors focused on rate decisions, the growth outlook, and inflation views from the European Central Bank. 

The European Central Bank is widely expected to hold rates steady for the fourth time in a row, and policymakers may signal future rate cut timing.  

Market indexes are trading near record highs in Paris and Frankfurt as investors react positively to rising corporate earnings despite the weak economic backdrop. 

 

German Factory Orders Dropped In January

On the economic front, German factory orders declined sharply in January following a high volume of large orders in the previous month. 

New manufacturing orders adjusted for seasonal and calendar factors decreased 11.3% from the previous month, and December orders were revised to a jump of 12%, Destatis reported Thursday. 

On an annual basis, factory orders declined 6.0%.

In all three main groups, orders declined, capital goods fell 13.1%, intermediate goods declined 9.3%, and consumer goods eased 5.7%.

Domestic and foreign orders fell during the month. 

Foreign orders fell by 11.4%, and orders from the Eurozone decreased by 25.7%. Orders from outside the eurozone, however, rose by 1.6%. 

Domestic orders fell by 11.2%, largely because of the higher base effect in the previous month. 

 

UK Home Price Growth Slowed In February 

Home prices rose at a slower pace in February, signaling relatively stable home prices at the start of 2024, according to the mortgage lender Halifax. 

The Halifax House Price Index rose 1.7% in February, slower than the revised 2.3% growth in the previous month. 

On a monthly basis, home prices rose 0.4%, an increase for the fifth month in a row, supported by a decline in mortgage rates and rising wages. 

The home price in London led all regions with an average price of £536,996. 

 

Europe Indexes and Yields

The DAX index decreased by 0.3% to 17,670.55, the CAC-40 index rose by 0.3% to 7,938.50, and the FTSE 100 index inched higher by 0.3% to 7,658.65.

The yield on 10-year German bonds edged down to 2.31%; French bonds inched lower to 2.76%; the UK gilts edged lower to 4.01%; and Italian bonds inched lower to 3.64%.

The euro edged higher to $1.089, the British pound inched higher to $1.276, and the U.S. dollar weakened to 88.09 Swiss cents.

Brent crude decreased $0.38 to $82.58 a barrel, and the Dutch TTF natural gas increased by €0.02 to €26.55 per MWh.

 

Europe Stock Movers

Stellantis NV increased 0.04%, and the Italian automaker said it plans to invest €5.6 billion in South America between 2025 and 2030.

Grafton Group decreased 0.8% to 957.50 pence after home improvement retailer reported 2023 pre-tax profit declined 27% from the previous year. 

Aviva plc rose 2.3% to 465.40 pence after the UK-based insurance company reported a 9% increase in annual operating profit. 

Hugo Boss dropped 17.4% to €52.24 after the German fashion house warned that 2024 operating profit is likely to lag market expectations. 

Deutsche Lufthansa declined 0.3% to €7.02 after the German airline signaled a subdued outlook for the fiscal year 2024. 

Continental AG decreased 3% to €70.56 after the German tire maker reported annual operating results that fell short of market expectations.

Virgin Money UK jumped 37% to 216.20 pence after the Nationwide Building Society agreed to acquire the lender for £2.9 billion.