European Markets Flatlined In Busy of Week of Rate Decisions, Manufacturing Activities Diverged In Spain and Italy

Bridgette Randall
04 Nov, 2024
London

European market indexes lacked direction in a busy week of earnings and economic releases. 

Benchmark indexes in Paris, London, Milan, and Frankfurt traded in a tight range as investors prepare to review quarterly updates from leading corporations. 

The Bank of England is expected to lower its key lending rate by 25 basis points, reflecting weakening inflationary pressures. 

The central banks of Norway and Sweden are set to release their rate decisions this week, and traders are expecting both central banks to hold rates steady. 

Germany is scheduled to release its international trade data, and the country's trade deficit is likely to expand from the previous month. 

The U.S. Federal Reserve is also expected to lower its key interest rates by 25 basis points following a supersize 50 basis point cut in September. 

The Standing Committee of the People's National Congress in China kicked off its weeklong meeting that will decide the debt level increase and pave the way for additional fiscal stimulus measures. 

The meeting is closely watched by investors, as lawmakers are likely to approve additional spending between 2 trillion and 4 trillion yuan, or between €250 billion and €490 billion. 

Closer to home, a private survey showed Spain's factory activities expanded at the fastest pace in October since February 2022, driven by improving new orders and rising production. 

The HCOB Spain Manufacturing PMI increased 54.5 from 53.0 in September, S&P Global reported Monday. 

Italy's factory activities continued to contract for the seventh consecutive month in a row in October amid deteriorating demand from the U.S., Middle East, and other Eurozone members. 

The HCOB Italy Manufacturing PMI slowed to 46.9 from 48.3 in the previous month, S&P Global said in a separate report. 

 

Europe Indexes and Yields

The DAX index increased by 0.1% to 19,267.85; the CAC-40 index rose by 0.3% to 7,430.84; and the FTSE 100 index rose by 0.7% to 8,235.38. 

The yield on 10-year German bonds edged higher to 2.41%, French bonds inched higher to 3.15%, the UK gilts edged higher to 4.46%, and Italian bonds decreased to 3.66%.

The euro edged higher to $1.09; the British pound inched higher to $1.29; and the U.S. dollar weakened to 86.32 Swiss cents.

Brent crude increased $2.20 to $75.30 a barrel, and the Dutch TTF natural gas rose by €1.27 to €40.21 per MWh. 

 

Europe Stock Movers

Energy stocks rebounded after crude oil prices advanced following the OPEC+'s decision to delay an increase in output by a month. 

Shell PLC gained 1.2% to 2,610.50 pence, BP plc rose 1.5% to 384.0 pence, and TotalEnergies SE increased 0.8% to €58.36. 

Eni SpA increased 0.7% to €14.13 after the Italian energy company completed the sale of two upstream offshore assets. 

Burberry Group increased 6% to 860.51 pence on speculation that Italy-based Moncler could be preparing for a bid for the luxury fashion product maker. 

Skanska AB advanced 1% to SEK 219.80 after the Swedish construction company signed a contract to build office buildings in London's West End. 

Mining companies advanced following a rebound in commodities prices as China's top legislators commenced a weeklong meeting to finalize the amount of additional fiscal measures. 

Anglo American increased 1.4% to 2,428.50 pence, Antofagasta advanced 0.8% to 1,777.81 pence, and Glencore added 0.8% to 410.83 pence.