European Markets Halted 3-Day Slide, UK Consumer Inflation Accelerated In October

Bridgette Randall
20 Nov, 2024
London

European markets rebounded after tensions between the U.S. and Russia appeared to ease, and investors debated future rate paths. 

Benchmark indexes in Paris, Frankfurt, Milan, and London edged slightly higher, but they traded in a tight range. 

Market sentiment recovered after Russia's foreign minister, Sergei Lavrov, said all efforts would be made to avoid a nuclear confrontation and the U.S. restrained from updating its nuclear policy. 

 

UK Consumer Price Inflation Accelerated 

Consumer price inflation in the U.K. accelerated more than expected in October, according to the latest data released by the Office for National Statistics. 

Annual inflation accelerated to a six-month high of 2.3% in October from 1.7% in September, driven by a 5.5% jump in housing and household services, a 4.3% increase in restaurants and hotels, and a 5% rise in prices for services.

However, food inflation was steady at 1.9%. 

Annual core inflation, which excludes volatile food and energy prices, accelerated to 3.3% from 3.2%. 

 

Germany's Producer Price Deflation Extends to 16th Month in October 

Producer prices in Germany declined for the sixteenth month in a row, driven by a sharp drop in energy prices, the Federal Statistical Office, or Destatis, reported Wednesday. 

Producer prices declined 1.1% from a year ago in October, easing from a 1.4% in the previous month. 

Excluding energy, producer prices rose 1.3% from a year ago. 

Capital goods prices rose 2.0%, consumer goods prices advanced 1.9%, durable goods rose 0.9%, and intermediate goods edged up 0.4%. 

On a monthly basis, producer prices increased by 0.2%, rebounding from a 0.5% decrease in September. 

 

Europe Indexes and Yields

The DAX index increased by 0.2% to 19,107.86; the CAC-40 index advanced by 0.2% to 7,242.55; and the FTSE 100 index rose by 0.1% to 8,104.60.

The yield on 10-year German bonds edged higher to 2.36%, French bonds inched up to 3.10%, the UK gilts edged higher to 4.49%, and Italian bonds increased to 3.58%.

The euro edged lower to $1.05; the British pound inched down to $1.26; and the U.S. dollar strengthened to 88.61 Swiss cents.

Brent crude increased $0.16 to $73.48 a barrel, and the Dutch TTF natural gas rose by €0.18 to €46.08 per MWh. 

 

Europe Stock Movers

Sage Group PLC soared 19% to 1,281.50 pence after the enterprise resource planning software company reported strong full-year financial results and announced a new stock repurchase plan. 

La Francaise des Jeux SA dropped 4.2% to €37.70 after Credit Agricole announced plans to sell a 2.2% stake in the lottery operator in France. 

Bank and construction stocks were among the leading gainers as investors unwound safe-haven trades following the easing of tensions between the U.S. and Russia. 

UniCredit SpA increased 0.3% to €38.87, Credit Agricole SA advanced 0.2% to €13.38, BNP Paribas decreased 0.7% to €58.89, Deutsche Bank advanced 0.9% to €16.04, and Barclays advanced 1% to 258.50 pence. 

Partners Group Holding AG advanced 1.1% to CHF 1,222.0 after the Swiss private equity group acquired a majority stake in Spain-based hospitality platform Bluesea Hotels.