European Markets Halt 3-week Rally, French Jobless Rate Held Steady at 7.5%

Bridgette Randall
17 May, 2024
Frankfurt

European markets edged lower for the second day in a row after a nine-day rally in the previous session. 

Market sentiment was cautious after several U.S. and European policymakers cautioned against rate cuts. 

Benchmark indexes in Frankfurt, Paris, and London extended weekly losses after comments from the European Central Bank rate-setting committee cautioned against additional rate cuts after June. 

In addition, three U.S. policymakers stressed the need to keep rates higher for longer until solid evidence emerges that inflation is on the way to 2%. 

The eurozone consumer price inflation was confirmed at 2.4% in April, matching the rate in March, the statistical agency Eurostat reported Friday. 

 

French Jobless Rate Held at 7.5% 

France's jobless rate held steady at 7.5%, matching rates in the previous two quarters. 

The unemployment rate in the first quarter increased by 6,000 to 2.3 million, the statistical agency INSEE reported Friday. 

The jobless rate among people between 15 and 24 inched up 0.6% to 18.1% and increased 0.1 percentage point to 5.1% for those older than 50. 

The unemployment rate between the ages of 25 and 49 eased by 0.2 percentage points to 6.8%. 

Moreover, mixed economic data from China also weighed on market sentiment. 

 

China's Property Market Woes Deepen, Retail Sales Growth Slows

China's retail sales rose less than expected by 2.3% in April, but the jobless rate declined to 5.0% from 5.3% in March. 

Industrial output, one of the few bright spots in the Chinese economy, rose faster-than-expected by 6.7% in April.

China's fixed-asset investment rose 4.2% from a year ago in the January–April period, slower than 4.5% in the January–March period. 

Property investment deepened to 9.8% in the first four months from 9.5% in the first quarter, prompting calls for wider and faster regulatory reforms. 

Meanwhile, overall residential floor space sold in April declined by 20.2%, and the sales value of new homes dropped by 28.3% from a year ago. 

 

Europe Indexes and Yields

The DAX index decreased by 0.4% to 18,667.67; the CAC-40 index fell by 0.4% to 8,154.76; and the FTSE 100 index inched lower by 0.4% to 8,407.41. 

The yield on 10-year German bonds edged up to 2.48%; French bonds inched higher to 2.98%; the UK gilts edged lower to 4.11%; and Italian bonds inched lower to 3.78%.

The euro edged higher to $1.084; the British pound inched higher to $1.266; and the U.S. dollar gained to 90.92 Swiss cents.

Brent crude increased $0.07 to $83.34 a barrel, and the Dutch TTF natural gas rose by €0.29 to €30.86 per MWh.

 

Europe Stock Movers

Richemont SA increased 5.8% to CHF 145.40 after the Swiss luxury goods company announced several management and board changes. 

Richemont appointed Nicolas Bos, currently serving as chief executive of Van Cleef & Arpels, as the company's new chief executive, replacing Jerome Lambert. 

SCOR SE declined 7.7% to €29.70 after the French reinsurance company said first-quarter net income dropped 37% to €196 million from €311 million a year ago. 

Engie SA decreased 1.6% to €15.53 after the French electric utility reported a slight decline in its operating earnings in the first quarter amid broad weakness in revenue. 

Revenue dropped 24.6% to €22.0 billion from €29.6 billion, and operating earnings edged down 0.1% to €5.4 billion.

The company reiterated its 2024 recurring income outlook between €4.1 billion and €4.8 billion and its operating earnings, excluding nuclear division, to range between €7.5 billion and €8.5 billion. 

Land Securities declined 2.8% to 670.50 pence after the company said annual rental income declined to £371 million from £393 million in 2023. 

Pre-tax losses shrank to 341 million from 622 million, and the basic loss per share fell to 43 pence from 83.6 pence a year ago. 

The company hiked the dividend by 2.6% to 39.6 pence from 38.6 pence a year ago. 

Unilever advanced 0.6% to 4,307.0 pence after the consumer products company launched its €1.5 billion stock repurchase plan.