German Industrial Production Rebounded, French Trade Deficit Widened

Bridgette Randall
08 Mar, 2024
Frankfurt

European market indexes struggled to advance in Friday's trading, and investors awaited the release of the eurozone's GDP data and labor market update in the U.S. 

Benchmark indexes in Frankfurt and Paris traded around the flatline, and they declined in London. 

Market sentiment remained positive in the hopes that major central banks are ready to pivot to cut interest rates as early as June. 

 

Broad Rebounds in German Industrial Production

Germany's monthly industrial production advanced for the first time in nine months in January, the Federal Statistics Office, or destatis, reported Friday. 

Seasonal and calendar-adjusted industrial production rose 1.0% from the previous month after falling 2.0% in December. 

Calendar-adjusted industrial production fell 5.5% from a year ago. 

The production of capital goods fell by 2.1%. However, the production of intermediate goods rose by 4.4% and the production of consumer goods by 4.0%. 

The broad-based increase in industrial production was driven by the rise in chemical production by 4.7%, in the food industry by 5.9%, and in machine maintenance and assembly by 11.1%. 

However, automobile industry production declined by 7.6%. 

Industrial production data excludes the output of the energy and construction sectors. 

Energy production declined by 3.7% and construction output increased by 2.7% from the previous month, respectively. 

 

France's Goods Trade Balance Deteriorated

France's goods trade balance deteriorated to €7.4 billion from €6.4 billion after the decline in exports overwhelmed the smaller fall in imports. 

Over the month, exports decreased to €48.8 billion from €50.4 billion, while imports declined to €56.2 billion to €56.8 billion.

In January 2024, the energy balance weakened by €0.4 billion, driven largely by the increase in the price of imported energy products. 

The balance of manufactured products fell by €0.2 billion and stood at a deficit of €4.0 billion, dragging the overall trade balance. 

The energy trade balance deteriorated by €0.4 billion to a deficit of €4.6 billion after five consecutive months of increase, and agricultural product surpluses held steady at €0.2 billion.

 

Europe Indexes and Yields

The DAX index decreased by 0.05% to 17,833.07, the CAC-40 index rose by 0.2% to 8,032.07, and the FTSE 100 index inched lower by 0.3% to 7,668.35.

The yield on 10-year German bonds edged down to 2.26%; French bonds inched lower to 2.71%; the UK gilts edged lower to 3.96%; and Italian bonds inched lower to 3.59%.

The euro edged higher to $1.09, the British pound inched higher to $1.28, and the U.S. dollar weakened to 88.09 Swiss cents.

Brent crude decreased $0.02 to $82.94 a barrel, and the Dutch TTF natural gas increased by €0.47 to €26.48 per MWh.

 

Europe Stock Movers

Mondi plc decreased 2.2% to 1,350.50 pence after the UK-based paper company agreed to acquire its smaller rival DS Smith for £5.14 billion. 

DS Smith stock soared 5.6% to 344.30 pence. 

Informa gained 0.4% to 808.60 pence after the UK-based information services provider and business-to-business trade show manager said organic revenue increased 30% in 2023. 

HelloFresh SE plunged 42% to €6.80 after the German meal-kit provider cut its core earnings outlook for the second time in five months and withdrew its half-year targets. 

Currys PLC fell 1.8% to 64.35 pence after the UK-based electronics retailer confirmed the sale of its operations in Greece and Cyprus for £156 million.