European Investors Turned Cautious Ahead of the ECB Meeting, French Trade Deficit Shrank

Bridgette Randall
09 Apr, 2024
Frankfurt

European market indexes traded lower, bond yields declined, and the euro hovered near its two-month average. 

Benchmark indexes in Frankfurt, Paris, and London edged lower amid cautious trading ahead of the European Central Bank's monetary policy decisions on Thursday. 

Market participants are worried that policymakers may not follow through on the possible rate cut as early as June, as signaled at the end of the last meeting on March 7. 

Moreover, investors are also concerned that the U.S. Federal Reserve Bank is more likely to delay its advertised rate cut later than previously expected, with spillover effects in global bond market. 

 

France's Goods Trade Deficit Shrank In February 

France's international goods trade deficit shrank to Є5.2 billion from Є7.2 billion in January after exports rose faster than imports, according to the latest data released by the general directorate of customs on Tuesday. 

Exports in February rose 4.7% to Є51.1 billion from Є48.8 billion in January, and imports advanced 0.5% to Є56.3 billion from Є56.0 billion in the previous month. 

The goods trade deficit in February decreased to Є5.2 billion from Є7.2 billion in the previous month, and the cumulative deficit improved to Є90.9 billion.  

Trade deficit dropped to the lowest since January 2021, after exports rose and the energy deficit declined in the month to Є3.8 billion from Є4.5 billion in the previous month. 

Excluding energy, the trade deficit shrank to Є2.8 billion from Є4.0 billion in January. 

In the manufacturing sector, trade deficit shrank to Є3.3 billon from Є4.0 billion; after consumer goods surplus rose to Є0.8 billion from Є0.7 billion, intermediate goods deficit shrank to Є0.9 billion from Є1.8 billion, and capital goods deficit expanded to Є3.2 billion from Є2.9 billion. 

 

Europe Indexes and Yields

The DAX index decreased by 0.7% to 18,198.56, the CAC-40 index fell by 0.6% to 8,072.06, and the FTSE 100 index inched higher by 0.1% to 7,952.90.

The yield on 10-year German bonds edged down to 2.39%; French bonds inched lower to 2.89%; the UK gilts edged higher to 4.08%; and Italian bonds inched lower to 3.73%.

The euro edged higher to $1.086, the British pound inched higher to $1.267, and the U.S. dollar edged lower to 90.35 Swiss cents.

Brent crude decreased $0.09 to $90.60. a barrel, and the Dutch TTF natural gas rose by €0.12 to €28.04 per MWh.

 

Europe Stock Movers

Atos declined 15% to €1.96, after the struggling French IT company announced its restructuring plan details. 

Nordex SE gained 2.5% to Є12.88 after the German wind turbine company won an order to supply 295 MW wind turbines to EDF Renewables in South Africa. 

Siemens AG declined a fraction to Є173.68 after the German engineering company said its Supervisory Board extended the contract for President and Chief Executive Officer Roland Busch for five years, starting April 1, 2025. 

Imperial Brands inched up 0.4% to 1,737.50 pence after the UK-based tobacco company reiterated its revenue and earnings outlook for fiscal 2024. 

Mining companies advanced in London trading after the copper price in Shanghai traded at a record high on the expectation of rising demand for manufactured goods in developed economies and in China. 

Anglo American, Antofagasta, and Glencore advanced between 1% and 2%. 

BP plc increased 1.5% to 516.30 pence after the company said it anticipates strong performance in the first quarter. 

HSBC Holdings gained 0.3% to 646.40 pence after the UK- and China-based bank said it plans to sell its banking operation in Argentina to Grupo Financiero Gallicia for about $550 million.