European Markets Extended Weekly Gains Amid Weak Macroeconomic Backdrop

Bridgette Randall
23 Aug, 2024
London

European market indexes advanced for the third session in a row, and indexes are set to close higher for the second consecutive week. 

Benchmark indexes in London, Paris, and Frankfurt jumped between 0.3% and 0.5% in Friday's trading as traders awaited comments from major central bank leaders at an annual gathering held in Jackson Hole, Wyoming. 

Investors have built up expectations that the U.S. Federal Reserve is likely to start its rate-cutting cycle at the end of the policy meeting in September, followed by additional cuts later in the year. 

Closer to home, France's statistical agency, INSEE, said that confidence among manufacturers increased more than expected in August. 

The manufacturing confidence index increased to 98.8 from 95.4, a 43-month low, in June. 

 

Europe Indexes and Yields

The DAX index increased by 0.5% to 18,595.71; the CAC-40 index rose by 0.5% to 7,560.72; and the FTSE 100 index advanced by 0.3% to 8,312.02. 

The yield on 10-year German bonds edged higher to 2.24%, French bonds inched higher to 2.95%, the UK gilts edged higher to 3.95%, and Italian bonds inched up to 3.60%.

The euro edged down to $1.11; the British pound inched higher to $1.31; and the U.S. dollar weakened to 85.22 Swiss cents.

Brent crude increased $1.12 to $78.36 a barrel, and the Dutch TTF natural gas fell by €0.38 to €36.35 per MWh.

 

Europe Stock Movers

Nestle SA declined 1.8% to CHF 87.80 after the Swiss food company announced that it plans to replace its current chief executive, Mark Schneider, with a long-time executive, Laurent Freixe. 

Oil companies were in focus after crude oil prices rebounded for the second day in a row but declined for the week amid demand growth worries in the U.S. and China. 

BP plc increased 0.6% to 428.80 pence, Shell PLC gained 0.3% to 2,715.50 pence, and TotalEnergies advanced 0.7% to €62.03. 

Unilever gained 0.3% to 4,807.0 pence, and the food company recalled 137,000 cases of popsicle products out of concern that they may contain undeclared milk. 

According to the U.S. Food and Drug Administration, Unilever recalled Jolly Rancher Frozen Confection Pops, citing potential harm to people with severe sensitivity to milk.