German Retail Sales Extend Decline to Fourth Month, UK's GDP Barely Expanded In 2023

Bridgette Randall
28 Mar, 2024
Frankfurt

European markets advanced, bond yields eased, and the euro and the pound drifted lower. 

Benchmark indexes in Paris and Frankfurt inched higher in record territory and extended weekly gains ahead of the Easter holiday on Friday and Monday. 

The DAX index extended its holiday-shortened weekly gain to 1.8%, the CAC-40 gained 1.2%, and the FTSE 100 index advanced 1%. 

In March, the DAX gained 5%, the CAC-40 index advanced 3.2%, and the FTSE 100 index increased 4.5%.  

In the quarter, the DAX increased 10.3%, the CAC-40 jumped 9.0%, and the FTSE 100 index gained 3.2%. 

Investors bid up stocks in the hope that the European Central Bank is likely to lower its rate as early as June after the Riksbank on Wednesday held its policy rate steady and suggested a possible rate cut in May or June. 

The UK economy was confirmed to be in a technical recession, according to the latest data released by the Office for National Statistics. 

The UK's economy contracted by 0.3% in the fourth quarter, as previously estimated, after shrinking by 0.1% in the third quarter, according to the final data released by the statistical agency. 

With the economy in a technical recession towards the end of the year, gross domestic product rose only 0.1% in 2023, sharply lower than 4.3% in 2022. 

 

German Retail Sales Extend Decline to Fourth Month

German retail sales unexpectedly declined in February after consumers retrenched to basics amid elevated interest rates and high inflation. 

Retail sales declined for the fourth month in a row to 1.9% in February, and the decline was the steepest since October 2022, the Federal Statistical Office, destatis, reported Thursday. 

Retail sales declined 2.7% from a year ago, fell for the fourth month in a row, and fell at the fastest pace in five months. 

Food sales declined 1.7%, and non-food item sales dropped 1.0%. 

Real calendar and seasonally adjusted sales in non-food retail fell by 1.0% in February compared to the previous month and by 2.6% compared to a year ago. 

Real sales in Internet and mail order sales in February declined 2.8% compared to the previous month and dropped 4.7% from a year ago. 

 

German Payrolls Expanded at a Slower pace. 

The German job market expanded at a slower pace in February compared to the previous month. 

Seasonally adjusted payrolls increased by 14,000 following the expansion of 56,000 in January, and about 45.7 million people were employed in Germany, according to the preliminary calculation by the statistical agency. 

Germany's jobless rate increased after the expanding job market attracted more people to the labor force. 

The German unemployment rate rose to 3.5% in February from 3.0% in the corresponding month a year ago, Destatis reported Thursday in a separate report. 

About 1.55 million people were unemployed in February, an increase of 14.3%, or 193,000, compared to a year ago. 

Adjusted for seasonal and irregular effects, the number of unemployed people was 1.41 million in February, 5,000 higher than in the previous month of January. 

The adjusted unemployment rate is unchanged from the previous month of January, at 3.2%. 

 

Europe Indexes and Yields

The DAX index increased by 0.2% to 18,506.05, the CAC-40 index rose by 0.5% to 8,249.09, and the FTSE 100 index inched higher by 0.5% to 7,974.41.

The yield on 10-year German bonds edged down to 2.31%; French bonds inched lower to 2.81%; the UK gilts edged lower to 3.99%; and Italian bonds inched lower to 3.66%.

The euro edged higher to $1.077, the British pound inched higher to $1.259, and the U.S. dollar held steady at 90.60 Swiss cents.

Brent crude decreased $0.37 to $85.77. a barrel, and the Dutch TTF natural gas fell by €0.20 to €27.49 per MWh.

 

Europe Stock Movers

Renault SA advanced 1.1% to €46.96 after the company sold 99.13 million shares, or about 2.5%, to Nissan for €358 million and participated in the company's stock repurchase program. 

Casino Guichard Perrachon plunged 66% to €0.036 after the retailer announced the completion of its financial restructuring. 

Stratec SE dropped 9.8% to €38.55 after the German maker of in-vitro diagnostic analyzers reported a decline in 2023 profit due to a fall in sales and an increase in expenses.