Eurozone Retail Sales Dropped In April, German Factory Orders Unexpected Eased In April

Bridgette Randall
06 Jun, 2024
Frankfurt

Benchmark indexes in Europe advanced for the third day in a row in the hopes of a widely anticipated rate cut by the European Central Bank later today. 

Market indexes in Frankfurt, Paris, and London advanced between 0.3% and 0.7% amid expectations of a cut in three key lending rates by 25 basis points for the first time since 2016. 

The ECB lowered only one of the three key lending rates, the deposit facility rate, in 2019. 

Investors are also looking forward to comments from ECB president Christine Lagarde about the possibility of additional rate cuts in the year. 

Most market participants are looking for at least one rate cut in September or December. 

In other economic news, Switzerland's jobless rate held steady at 2.3% in May compared to the previous month, the Secretariat for Economic Affairs announced Thursday. 

 

Eurozone Retail Sales Edged Lower In April

In other economic news, eurozone retail sales decreased 0.5% in April, following a downwardly revised 0.7% increase in March, Eurostat reported Thursday. 

Sales of food, drinks, and tobacco fell 0.5% in April after rising 1% in the previous month, and auto fuel sales decreased 2.2%, reversing the 1% gain. 

Nonfood sales declined 1% in April, matching the rate of decline in the previous month. 

On an annual basis, retail sales were unchanged following a 0.7% rise in March. 

 

German Factory Orders Declined In April.

Real factory orders, adjusted for seasonal and calendar factors, in Germany decreased by 0.2% from the previous month in April, the Federal Statistical Office, or Destatis, reported Thursday. 

On an annual basis, new orders declined 1.6%.

Incoming orders in a three-month period to April declined 5.4% from the previous three-month period, mainly due to a large order in December 2023. 

Excluding the large orders, new orders in April were 2.9% higher than in March and 1.4% lower in the three-month period between February and April than the previous three-month period. 

The decline in orders was widespread, and orders declined in four key sectors. 

Incoming orders for electric equipment declined 4.1%, mechanical engineering fell 1.5%, aircraft, ships, and trains dropped 15.4%, and electronic and optical products fell 5.1%. 

However, orders in the automotive industry rose 4.1%, offsetting the overall decline in incoming orders. 

Domestic orders declined by 0.3%, and foreign orders fell by 0.1%, driven by a 1.4% decline in orders from the eurozone, while orders from the rest of the world rose by 0.6%. 

 

Europe Indexes and Yields

The DAX index increased by 0.7% to 18,696.65; the CAC-40 index rose by 0.4% to 8,041.74; and the FTSE 100 index advanced by 0.3% to 8,272.49. 

The yield on 10-year German bonds edged lower to 2.53%; French bonds inched lower to 3.02%; the UK gilts edged lower to 4.17%; and Italian bonds inched lower to 3.82%.

The euro edged higher to $1.087; the British pound inched higher to $1.276; and the U.S. dollar weakened to 89.11 Swiss cents.

Brent crude increased $0.27 to $77.68 a barrel, and the Dutch TTF natural gas rose by €0.33 to €33.71 per MWh.

 

Europe Stock Movers

N Brown Group soared 31% to €0.17 after the online fashion retailer reported a profit in its fiscal year 2024. The company also estimated sales would improve in the current fiscal year. 

Hargreaves Services jumped 2.4% to 573.68 pence, and the company estimated pre-tax earnings marginally ahead of market expectations. 

In Paris trading, Carrefour declined 0.8% to €14.82, Capgemini rose 1.2% to €194.30, and L'Air Liquide rose 1% to €186.46. 

In Frankfurt trading, BMW advanced 0.1% to €91.48, Deutsche Bank gained 1.5% to €15.24, Deutsche Lufthansa declined 0.7% to €6.32, and Siemens AG decreased 1% to €177.04.