European Markets Extend Weekly Advance, Bond Yields Edge Higher

Bridgette Randall
26 Apr, 2024
Frankfurt

European markets extended weekly gains and indexes are set to halt declines of three weeks in a row. 

Benchmark indexes in Frankfurt, Paris, and London advanced in Friday's trading; the euro held firm; and bond yields edged slightly higher. 

Investors stayed focused on the latest batch of earnings after Electrolux, SKF, Saint-Gobain, Vinci, Airbus, and Safran reported positive quarterly results. 

Market enthusiasm was curbed after U.S. economic growth slowed in the first quarter to 1.6%, but consumer price inflation accelerated to 3.4% from 1.8% in the previous quarter. 

The slower growth and higher inflation are the worst combination for investors, as the report signaled that the Federal Reserve is less likely to lower its policy rate at its next meeting in June. 

Moreover, the U.S. personal consumption expenditure index, an alternative measure of inflation, is scheduled to be released at 8:30 a.m. ET. 

Closer to home, the consumer confidence index in France eased to 90 in April from 91 in the previous month, France's statistical agency, INSEE, reported Friday. 

Bank lending to households in the Euro Area in March edged up 0.2% to €6.875 trillion, the slowest pace of increase since February 2015, the European Central Bank reported Friday. 

Consumer loan demand continues to fall amid tightening measures by the central bank and two-decade-high interest rates. 

Lending to corporations rose 0.4% to €5.132 trillion, following a rise of 0.3% in the previous month. 

Overall lending to the private sector, including non-financial corporations and households, rose to 0.8% from 0.7%. 

 

Europe Indexes and Yields

The DAX index increased by 0.8% to 18,062.35; the CAC-40 index rose by 0.4% to 8,044.96; and the FTSE 100 index inched higher by 0.5% to a new intraday record high of 8,120.09. 

The yield on 10-year German bonds edged up to 2.59%; French bonds inched higher to 3.08%; the UK gilts edged higher to 4.35%; and Italian bonds inched higher to 3.92%.

The euro edged higher to $1.073; the British pound inched higher to $1.253; and the U.S. dollar edged higher to 91.14 Swiss cents.

Brent crude increased $0.49 to $89.60 a barrel, and the Dutch TTF natural gas rose by €0.53 to €29.37 per MWh.