Positive Bias Lifts DAX and CAC-40 to New Intra-day Highs, Euro Area Inflation Eases

Bridgette Randall
18 Mar, 2024
Frankfurt

European markets advanced in Monday's trading as investors awaited monetary policy decisions from major central banks. 

Investors pared expectations of a rate cut in the U.S. after consumer and producer price inflation in February stayed ahead of expectations. 

The Federal Reserve may keep interest rates unrevised for the next several months because of the resilient U.S. economy and healthy labor market conditions. 

Market participants may have to adjust their rate expectations if the Federal Reserve's economic growth projection and interest rate outlook call for higher rates for at least two months or longer. 

Benchmark indexes in Frankfurt and Paris gained about 0.2%, and they traded near record highs as investors reviewed the latest eurozone inflation data. 

 

Euro Area Inflation Eases In February 

Euro Area inflation eased to 2.6% in February from 2.8% in January and fell from 8.5% in the corresponding month a year ago, Eurostat reported Monday. 

A year earlier, the rate was 8.5%. 

The steady decline in energy prices supported the easing of inflation from the previous month and from a year ago; services inflation was 1.73%; food, drink, and tobacco inflation decreased to 0.8%; and energy inflation turned negative to 0.4%. 

 

Europe Indexes and Yields

The DAX index increased by 0.3% to 17,993.25, the CAC-40 index rose by 0.1% to 8,171.82, and the FTSE 100 index inched higher by 0.102% to 7,738.82.

Last week, the DAX index gained 1.7%, the CAC-40 index advanced 2.4%, and the FTSE 100 index inched up 1.3%. 

The yield on 10-year German bonds edged up to 2.46%; French bonds inched higher to 2.90%; the UK gilts edged higher to 4.14%; and Italian bonds inched lower to 3.70%.

The euro edged higher to $1.089, the British pound inched higher to $1.273, and the U.S. dollar held steady at 88.34 Swiss cents.

Brent crude increased $0.60 to $85.95 a barrel, and the Dutch TTF natural gas advanced by €1.33 to €28.63 per MWh.

 

Europe Stock Movers

Hannover Re increased 1.1% to €247.30 after the German reinsurance company reported an increase in full-year net income, and the company estimated improved results in the fiscal year 2024. 

Logitech International decreased 7.4% to CHF 77.98 after the company announced the departure of its chief financial officer, Charles Boynton. 

Julius Baer declined 1.1% to CHF 49.57 after the Swiss financial services firm announced its targets for the next two years. 

Metals and mining companies declined after China reported construction industry investment shrank by more than 9% in the two months to February. 

Antofagasta and Anglo American declined by 1%, but Glencore increased by 1.2%. 

Marshalls declined 7% to 270.0 pence after the UK-based building materials group reported a decline in annual revenue and pre-tax earnings. 

Currys gained 2.5% to 58.25 pence after the UK-based electronics retailer raised its profit outlook. 

British American Tobacco increased 1.1% to 2,369.0 pence after the company launched its stock buyback program after selling part of its stake in ITC for £1.6 billion. 

ProsiebenSat Media decreased 0.2% to €6.32, and the company's major shareholder, MFE-MediatorEurope, stepped up its pressure on the German broadcaster to separate its e-commerce operations from its core television services. 

British Land Company advanced 2.8% to 378.90 pence after the company announced a 50:50 joint venture with Royal London Asset Management.