European Markets Lacked Direction, Swiss GDP Growth Accelerated In Second Quarter

Bridgette Randall
03 Sep, 2024
London

European markets struggled for the second trading day of September as investors debated the weak macroeconomic outlook and future rate path. 

Benchmark indexes in Paris, London, and Frankfurt swung around the flatline, and investors looked forward to monetary policy decisions from the U.S. Federal Reserve and the European Central Bank later in the month. 

Market indexes staged a solid recovery in the previous three weeks after dropping as much as nearly 10% over a two-week period ending in the first week in August. 

Investor confidence was further bolstered after inflation updates last week in the eurozone, Spain, Germany, and France indicated steady decline toward the European Central Bank's target rate of 2%. 

This week investors are looking forward to the release of tourist arrivals and car sales updates in Spain and the manufacturing and service sector surveys in the Eurozone.

Investors are also awaiting the release of retail sales updates in the eurozone and Italy, the international trade balance in Germany and France, and the third and final estimate of the second quarter GDP growth in the eurozone.

 

Swiss GDP Growth Accelerated In Second Quarter 

Swiss GDP growth in the second quarter accelerated to 0.7% from the previous month, the State Secretariat for Economic Affairs reported Tuesday. 

The 2.6% increase in manufacturing sector activities was the main driver of the growth; however, net international trade contributed negatively after exports declined 5% and imports soared 13.8%. 

On an annual basis, GDP growth accelerated to 1.8% from 0.6% rise in the first quarter. 

 

Spain's Registered Unemployment Increased at the Slowest Pace Since 2016

The number of people registered as jobless in Spain increased by 21,844 or 0.9% from the previous month to 2.6 million people, the ministry of labor and social security reported Tuesday. 

The unemployment in August fell to the lowest level since 2008, and generally unemployment rises in the month because of seasonal factors. 

Seasonally adjusted unemployed fell by 7,724 people in August. 

The registered unemployment rate fell in the agriculture sector by 2,337 people, or 2.60%, and among the group with no previous employment, it fell by 3,150 people (-1.33%). 

The unemployment rose in services by 20,189 people, or 1.11%; in construction by 4,187 people, or 2.11%; and in industry by 2,995 people, or 1.50%.

Unemployment among young people under 25 years of age rose by 2,186 people, or 1.25%, in August from the previous month to 177,112, the lowest figure in the series for the month of August.

 

Europe Indexes and Yields

The DAX index decreased by 0.3% to 18,870.15; the CAC-40 index fell by 0.2% to 7,631.47; and the FTSE 100 index declined by 0.5% to 7,631.47. 

The yield on 10-year German bonds edged higher to 2.32%, French bonds inched up to 3.04%, the UK gilts edged up to 4.03%, and Italian bonds increased to 3.71%.

The euro edged down to $1.10; the British pound inched higher to $1.31; and the U.S. dollar strengthened to 85.15 Swiss cents.

Brent crude decreased $1.69 to $75.56 a barrel, and the Dutch TTF natural gas fell by €0.95 to €37.60 per MWh. 

 

Europe Stock Movers

Swiss Life Holding declined 0.2% to CHF 686.80 and reversed the earlier gain in the day, and the company reported better-than-expected results in the first half, driven by strong performance in its asset management and insurance operations. 

Partners Group dropped 8.2% to CHF 1,123.0, and the Swiss private equity form reported weaker-than-expected quarterly results. 

Wizz Air Holdings declined 0.5% to GBX 1,279.0, and the Hungarian discount airline said passenger count and load factor increased from a year ago in August. 

Watches of Switzerland PLC jumped 4.2% to 395.0 pence after the UK-based luxury watches and jewelry retailer reiterated its fiscal year outlook. 

Ashtead Group increased 2.6% to 5,498.68 pence after the equipment rental company reiterated its annual profit estimate.