European Markets Trade In Tight Range, Hourly Labor Cost Growth Slows in the Fourth Quarter

Bridgette Randall
19 Mar, 2024
Frankfurt

Benchmark indexes in Europe flatlined, and investors awaited monetary policy announcements from the U.S. Federal Reserve and the Bank of England. 

The DAX index and the CAC-40 index edged up 0.2% and traded near record highs as investors debated future rate paths in the eurozone and reviewed the latest monetary policy decisions from the Bank of Japan. 

The Bank of Japan ended its negative rate regime put in place in 2016 and raised rates for the first time in 17 years after inflation gathered steam and large corporations agreed to solid wage gains for the second year in a row. 

The central bank also said it will end the purchase of stock ETFs to support the stock market and stop managing the yield curve or targeting the yield on Japanese government bonds. 

The broad swathe of changes announced by the central bank surprised many market watchers, and the Japanese yen edged fractionally lower to 149.90 against the U.S. dollar after the announcement. 

Hourly labor cost in the eurozone rose 3.4% from a year ago in the fourth quarter of 2023, following a downwardly revised 5.2% increase in the previous three months, Eurostat reported Tuesday. 

The labor cost growth decreased in the quarter after the pace of increase of slowed in construction to 4.4% from 6.0%, industry eased to 4.2% from 5.7%, and services inched down to 4.1% from 5.7% a year ago, respectively. 

 

Europe Indexes and Yields

The DAX index increased by 0.2% to 17,956.85, the CAC-40 index rose by 0.2% to 8,163.73, and the FTSE 100 index inched lower by 0.01% to 7,721.61.

The yield on 10-year German bonds edged down to 2.43%; French bonds inched lower to 2.87%; the UK gilts edged lower to 4.08%; and Italian bonds inched lower to 3.67%.

The euro edged higher to $1.084, the British pound inched higher to $1.267, and the U.S. dollar held steady at 88.78 Swiss cents.

Brent crude decreased $0.37 to $86.52 a barrel, and the Dutch TTF natural gas fell by €0.36 to €28.46 per MWh.

 

Europe Stock Movers

Thyssenkrupp AG declined 0.6% to €4.80 after the German industrial conglomerate said that the company is exploring alternatives for its Marine Systems business with the private equity group Carlyle. 

Deutz AG rose 0.9% to €5.89 after the engine maker reported record earnings, which were in line with market expectations. 

The company delivered 186,718 engines, and fiscal year 2023 revenue increased to 9% of €2.1 billion and an adjusted EBIT of €120.4 million. 

The company guided fiscal year 2024 revenue to fall between €1.9 billion and €2.1 billion and adjusted its EBIT margin between 5.0% and 6.5%. 

Fraport Frankfurt Airport Services decreased 5% to €49.19 after the airport operator reported weaker-than-expected fourth quarter operating earnings and the company's 2024 outlook fell below market expectations. 

Close Brothers Group soared 7.2% to 358.80 pence after the financial services company announced its plans to raise £400 million to strengthen its balance sheet. 

Trustpilot Group gained 2.4% to 210.0 pence after the business review platform reported a narrower loss in the latest fiscal year, driven by improved sales. 

Unilever plc increased 2.8% to 3,925.0 pence after the food products company plans to separate its ice cream division and implement a productivity improvement program. 

SThree fell 2.2% to 415.0 pence after the recruitment company said the job market was challenging in the first two months of 2024.