German CPI Holds Steady In April, UK Wages Rose Faster than Inflation for the 10th Month

Bridgette Randall
14 May, 2024
Frankfurt

European markets traded around the flatline, and the euro edged higher in Tuesday's trading. 

Benchmark indexes in Paris, London, and Frankfurt edged up, and bond yield advanced amid interest rate uncertainty as investors debated reviewed the latest update on German inflation and UK's labor market update. 

 

German CPI Holds Steady in April

Germany's consumer price inflation was confirmed at 2.2% in April, matching the annual rate in March, and the preliminary report released on April 29 was unrevised, the Federal Statistical Office, or Destatis, reported Tuesday. 

Retail inflation dropped to the lowest level since May 2021, while the EU harmonized inflation inched slightly higher to 2.4% from 2.3% in the preliminary estimate. 

 

German Investor Morale Improves to a 26-month High

German investor morale improved and surged to the highest level in May since February 2022, the Centre for European Economic Research reported Tuesday. 

The ZEW Indicator of Economic Sentiment increased to 47.1 in May from 42.9 in April, the tenth consecutive month of improving confidence among financial experts, driven in part by the indications of German economic recovery and better-than-expected first-quarter GDP growth.

The British pound held steady after the latest update on the labor market showed improving conditions. 

 

UK Real Wages Advance 10th Consecutive Month 

Regular pay in the UK increased 6% from a year ago in the March quarter to £637 per week, the Office for National Statistics reported Tuesday. 

Wage gains matched the annual increase in the previous three-month period ending in February and held at the 2022 lows. 

Total pay, which includes bonuses, rose 5.7% in the period from a year ago. 

The jobless rate edged higher for the third month in a row to 4.3%. 

Adjusted for inflation, real total wages increased 1.7%, and real total pay advanced 2.0%. 

 

Europe Indexes and Yields

The DAX index decreased by 0.2% to 18,711.13; the CAC-40 index fell by 0.1% to 8,204.76; and the FTSE 100 index inched higher by 0.03% to 8,417.63.

The yield on 10-year German bonds edged up to 2.51%; French bonds inched higher to 3.02%; the UK gilts edged higher to 4.16%; and Italian bonds inched higher to 3.87%.

The euro edged higher to $1.079; the British pound inched higher to $1.254; and the U.S. dollar edged higher to 90.78 Swiss cents.

Brent crude increased $0.01 to $83.36 a barrel, and the Dutch TTF natural gas rose by €0.30 to €29.96 per MWh.

 

Europe Stock Movers

Anglo American declined 2% to 2,650.50 pence after the mining company announced its plans to sell several units as part of a turnaround effort. 

Vodafone Group increased 3.4% to 72.42 pence after the international wireless telecom carrier said organic earnings in 2024 rose 2.2%. 

Flutter Entertainment declined 2.4% to 15,800 pence after the sports betting and gambling company reported a wider quarterly net loss. 

Hannover Re fell 3.4% to €227.20 despite the reinsurance company announcing strong first quarter results and confirming its 2024 outlook. 

Delivery Hero SE soared 22% to €30.93 after Uber Technologies agreed to acquire the company's Foodpanda delivery business in Taiwan for $950 million in cash. 

Rheinmetall AG decreased 3.2% to €519.20 after the German arms manufacturer missed its sales and earnings estimate in the first quarter. 

Veolia Environnement SA gained 3.1% after the French waste and water management company met first quarter core profit expectations. 

The company also announced winning a $320 million contract for a desalination plant in the United Arab Emirates.