EU Inflation Outlook Weakened, Passenger Car Registration Edged Slightly Higher

Bridgette Randall
29 Aug, 2024
London

European market indexes advanced for the third consecutive day in a row amid rising hopes of a possible rate cut in September. 

Benchmark indexes in Frankfurt advanced 0.7% after a report showed inflation in six key states in Germany in August inched lower, lifting hopes of a rate cut. 

The euro edged lower after Germany's inflation eased more than expected in August, setting the stage for a possible rate cut in September. 

Consumer price inflation slowed to 1.9% in August from 2.3% in July, the lowest level since March 2023, according to data released by the Federal Statistical Office, or Destatis. 

Spain's annual inflation rate declined to a one-year low, according to a preliminary report released by the National Statistics Institute on Thursday. 

Consumer price inflation eased to 2.2% in August from 2.8% in July, mainly because of the decline in fuel prices. 

The core rate of inflation, which excludes volatile food and energy prices, slowed to 2.7%, the lowest since January 2022, and down from 2.8% in July. 

Bond yields in the euro zone eased following the easing of inflation, raising the prospect of a possible rate cut in September after the policy meeting on September 12. 

 

EU Passenger Car Sales Growth Slowed in July 

Passenger car registration in the European Union increased slowed to 0.2% in July from 4.3% in the prior month, the European Automobile Manufacturers' Association reported Thursday. 

Car registration increased to 852,051 units in July, driven by mixed results in the four largest markets in the region. 

Registrations from a year ago increased 4.7% in Italy, 3.4% in Spain, but declined 2.3% in France and 2.1% in Germany. 

Battery electric car registration declined 10.8% to 102,700 units, with total market share shrank to 12.1% from 13.5% a year earlier, driven largely by the decline of 36.8% in Germany. 

Hybrid-electric vehicles continued to be in favor in July, with car registrations rising by 25.7% to 273,003 units. 

All four of the largest markets recorded double-digit gains, and sales surged in France by 47.4%, Spain by 31.5%, Germany by 22.4%, and Italy by 17.4%. 

This increase in sales lifted the hybrid-electric car market share to 32%, up from 25.5% a year ago.

For the first seven months of 2024, car registration increased 3.9% from the previous year to 6.5 million. 

 

Europe Indexes and Yields

The DAX index increased by 0.7% to 18,900.39; the CAC-40 index rose by 0.7% to 7,630.93; and the FTSE 100 index rose by 0.2% to 8,366.16. 

The yield on 10-year German bonds edged higher to 2.24%, French bonds inched down to 2.94%, the UK gilts edged up to 3.98%, and Italian bonds increased to 3.63%.

The euro edged down to $1.10; the British pound inched higher to $1.31; and the U.S. dollar weakened to 84.34 Swiss cents.

Brent crude decreased $0.08 to $78.72 a barrel, and the Dutch TTF natural gas rose by €0.21 to €38.50 per MWh. 

 

Europe Stock Movers

Automakers edged slightly higher after passenger car registration in the European Union advanced in July. 

Volkswagen Group AG edged up 0.1% to €103.50, Mercedes-Benz Group added 0.6% to €62.55, BMW increased 0.2% to €83.66, and Renault inched up 0.4% to €43.03. 

British bank stocks rebounded between 1% and 2% and reversed losses in the previous session on the worry that the latest budget from the new government could impose additional taxes on the sector. 

HSBC Holdings jumped 0.5% to 662.90 pence, Barclays PLC advanced 1.4% to 227.10, NatWest Group PLC inched up 0.5% to 339.80 pence, and Lloyds Banking Group jumped 0.9% to 339.80 pence. 

GSK plc increased 0.6% to 1,660.50 pence after the pharmaceutical company's RSV received approval for a wider use in adults in Europe. 

Delivery Hero SE soared 10% to €25.85 after the food delivery service provider reported better-than-expected results in the first half. 

Revenue increased to €3.09 billion from €2.6 billion a year earlier, driven by an increase in gross merchandise volume to €11.89 billion from €11.08 billion. 

The company reiterated its annual gross merchandise volume to increase between 7% and 9%, revenue to jump between 18% and 21%, and adjusted operating earnings between €725 million and €775 million.