European Markets Trade Sideways with All Ears On ECB President Lagarde Comments

Bridgette Randall
11 Apr, 2024
Frankfurt

European market indexes struggled to advance ahead of monetary policy decisions by the European Central Bank. 

Benchmark indexes in Frankfurt, Paris, and London decreased, and investors looked forward to comments from European Central Bank president Christine Lagarde. 

The ECB is widely expected to hold its main refinancing operation rate steady at a 22-year high of 4.50% and hold the deposit facility rate at 4.0%. 

Inflation has steadily declined to 2.4% in March after peaking at 10.6% in October 2022, largely because of the fall in imported energy prices. 

However, service inflation continues to stay elevated at 4%, making it harder for policymakers to bring down inflation below 2%. 

Service sector inflation is closely watched by policymakers because about 70% of the labor force is employed in the sector.

 

Europe Indexes and Yields

The DAX index decreased by 0.6% to 17,994.90, the CAC-40 index fell by 0.2% to 8,033.83, and the FTSE 100 index inched lower by 0.2% to 7,941.36.

The yield on 10-year German bonds edged up to 2.45%; French bonds inched higher to 2.93%; the UK gilts edged higher to 4.23%; and Italian bonds inched lower to 3.81%.

The euro edged higher to $1.073; the British pound inched higher to $1.253; and the U.S. dollar edged lower to 91.22 Swiss cents.

Brent crude decreased $0.69 to $89.89. a barrel, and the Dutch TTF natural gas rose by €1.54 to €29.02 per MWh.

 

Europe Stock Movers

Givaudan SA declined 1.3% to CHF 3,980.0, despite the Swiss fragrance and flavor maker reporting higher first-quarter sales. 

Societe Generale increased 0.9% to €25.36 after the French lender agreed to sell its equipment leasing and financing business to BPCE for €1.1 billion. 

AstraZeneca PLC rose 1.9% to 10,942.0 pence after the biopharmaceutical company announced its plan to increase its dividend by 7% in 2024. 

Publicis Groupe SA added 1.5% to €102.10 after the French advertising company reported organic sales in the first quarter increased by 4.9%, driven by strong performance in all regions. 

Deutsche Lufthansa decreased 2.5% to €6.98 after the state-controlled German airline suspended all flights to Tehran because of the rising tensions in the Middle East. 

Gerresheimer AG dropped 4.4% to €6.98 after the German manufacturer of packing products for medication and drug delivery devices reported that its first-quarter income slightly declined. 

Darktrace PLC increased 6.3% to 464.90 pence after the cybersecurity and artificial intelligence company returned to revenue growth in its fiscal third quarter. 

Revenue increased 26.5% from a year ago to $176.1 million, and annual recurring revenue increased 23.5% at the end of the March quarter to $731.1 million. 

The company raised its revenue growth expectation to 25.5%, 50 basis points higher than the upper end of its previously announced range, reflecting strong demand from customers and higher conversion rates. 

The company revised its adjusted operating earnings margin to 23% from the minimum of 21% in the previous estimate.