European Indexes Advanced and Bond Yields Eased, Industrial Output Weakness Extended to July

Bridgette Randall
13 Sep, 2024
London

European markets traded higher a day after the European Central Bank lowered its rates, but the central bank provided little clarity about the future rate path. 

Benchmark indexes in Paris, London, and Frankfurt edged higher between 0.2% and 0.5%, and bond yield traded down for the fifth session in a row. 

The European Central Bank, in a statement released after the rate decisions, confirmed that while inflation is easing, wages are still rising at an elevated pace, which could rekindle inflationary pressures. 

In addition, at the press conference after the governing council meeting, ECB president Christine Lagarde provided little clarity about the next steps of the policymakers and added that rate decisions are going to be based on future data flow. 

On the economic front, industrial output of the Euro Area declined 2.2% from a year ago in July, Eurostat reported Friday. 

Industrial output has been declining since May 2023, barring only January 2024, indicating weak domestic demand overwhelming rising exports. 

France's annual consumer price inflation was revised lower to 1.8% from the preliminary estimate of 1.9% and from 2.3% in June, according to an update released by the statistical agency INSEE. 

Consumer price inflation in August dropped to the lowest level since July 2021, largely because of weak energy and electricity prices. 

 

Europe Indexes and Yields

The DAX index increased by 0.5% to 18,617.54; the CAC-40 index rose by 0.3% to 7,457.28; and the FTSE 100 index rose by 0.2% to 8,257.62. 

The yield on 10-year German bonds edged higher to 2.13%, French bonds inched lower to 2.83%, the UK gilts edged down to 3.77%, and Italian bonds decreased to 3.51%.

The euro edged up to $1.11; the British pound inched higher to $1.31; and the U.S. dollar weakened to 84.78 Swiss cents.

Brent crude increased $0.69 to $72.66 a barrel, and the Dutch TTF natural gas rose by €0.55 to €35.79 per MWh. 

 

Europe Stock Movers

Worldline SA plummeted 19.2% to €6.79, and the payment service provider lowered its revenue and core earnings outlook. 

The company also announced the departure of its chief executive, Giles Grapinet. 

Mining companies traded higher after copper prices surged in the hopes of higher demand ahead of the National Day Holiday, also known as Golden Week, starting October 1. 

Antofagasta declined 0.1% to 1,725.0 pence, Anglo American decreased 0.3% to 2,056.50 pence, and Glencore jumped 0.6% to 374.75 pence. 

Unilever plc increased 0.7% to 4,960.0 pence after the consumer products maker launched the second and final phase of its Є1.5 billion stock buyback. 

Commerzbank AG advanced 3.2% to €15.47 after the head of the Bundesbank, Joachim Nagel, said that the central bank will closely look at Italy-based UniCredit's plan to acquire the German bank.