European Markets On Hold Ahead of Busy Week of Earnings, Spain's Retail Sales Soar

Bridgette Randall
28 Oct, 2024
London

European markets erased early gains in Monday's trading, and investors turned cautious in a busy week of earnings and economic releases. 

Benchmark indexes in Paris, London, Milan, and Frankfurt traded around the flatline as investors looked for clues about the amount and timing of possible rate cuts by the European Central Bank. 

Investors are expecting the eurozone GDP in the third quarter to expand by 0.2%, and consumer inflation in October is likely to hover near 1.8%.

Investors anticipated third-quarter GDP in France and Italy to grow by a fraction but contract by 0.3% in Germany. 

Economists are anticipating unemployment in the Euro Area to stay near the record level of 6.4%.

In the U.K., the new Labour government is scheduled to announce its budget on October 30, as the finance minister plans to increase the borrowing limit to finance infrastructure investment.

In other economic news, Spain's retail sales increased 4.1% from a year ago in September, following an upwardly revised 2.4% in the prior month, according to the National Statistics Institute. 

Retail sales rose at the fastest pace since March 2023, after nonfood sales advanced 4.8% from a year ago. 

Crude oil prices fell as much as 5% after Israel and Iran walked away from escalating tensions and avoided a regional war. 

Middle East tensions deescalated after last week Israel struck Iran's military facilities but avoided striking Iran's oil infrastructure and nuclear facilities, and Iran avoided vowing to retaliate. 

 

Europe Indexes and Yields

The DAX index decreased by 0.2% to 19,435.0; the CAC-40 index rose by 0.2% to 7,511.68; and the FTSE 100 index decreased by 0.2% to 8,230.76. 

The yield on 10-year German bonds edged higher to 2.27%, French bonds inched higher to 3.01%, the UK gilts edged down to 4.21%, and Italian bonds decreased to 3.49%.

The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar strengthened to 86.62 Swiss cents.

Brent crude decreased $4.25 to $71.78 a barrel, and the Dutch TTF natural gas fell by €1.55 to €42.05 per MWh. 

 

Europe Stock Movers

Energy stocks traded lower after Israel and Iran avoided a possible regional war. 

BP plc declined 2.1% to 396.60 pence, Shell PLC dropped 2.2% to 2,493.81 pence, and TotalEnergies SE eased 1.9% to €59.14. 

Philips NV plunged 17.5% to €24.30 after the medical device and equipment company lowered its annual sales outlook, citing a deteriorating demand from hospitals and consumers in China. 

KPN NV dropped 1.7% to €3.70 despite the Dutch telecom carrier reiterating its annual outlook. 

Travel and leisure stocks traded higher after crude oil prices eased. 

Deutsche Lufthansa AG increased 1.9% to €6.85, Air France advanced 2.3% to €9.34, and International Consolidated Airlines Group gained 0.9% to 213.50 pence.