Eurozone Bond Yields Advanced Fourth Consecutive Day, UK Inflation Accelerated In January

Bridgette Randall
19 Feb, 2025
London

Stock market indexes turned sharply lower in the European Union amid growing tariff threats and economic uncertainty. 

Benchmark indexes in Frankfurt and Paris eased from the highs in the previous session, and market enthusiasm waned after bond yields advanced for the fourth consecutive session. 

Investors were on the backfoot after the U.S. stepped up tariff threats, and the Trump administration reiterated imposing additional "reciprocal tariffs" covering all imports. 

The noise of tariffs, or import taxes, has weighed on the market for the last three weeks, as the incoming U.S. presidential administration stakes out a negotiating position with the European Union and adds pressure to buy LNG gas and other agricultural products from U.S. suppliers. 

The U.K.'s consumer price inflation accelerated to 3.0% in January from 2.5% in December, the Office of National Statistics reported Wednesday. 

The rebound in inflation was the fastest since March 2024, driven in large part by the increase in transportation costs and select food items. 

 

Europe Indexes and Yields

The DAX index decreased by 0.8% to 22,673.01, the CAC-40 index edged lower 0.8% to 8,139.37, and the FTSE 100 index declined by 0.5% to 8,725.49.

The yield on 10-year German bonds inched higher to 2.53%, French bonds increased to 3.19%, the UK gilts moved up to 4.61%, and Italian bonds edged higher to 3.58%.

The euro decreased to $1.04; the British pound was higher at $1.26; and the U.S. dollar was higher and traded at 90.45 Swiss cents.

Brent crude increased $0.51 to $76.32 a barrel, and the Dutch TTF natural gas was lower by €0.49 to €49.38 per MWh.

 

Europe Stock Movers

HSBC Holdings plc decreased 0.3% to 895.40 pence, and the Hong Kong- and London-based financial service provider reported a 2% increase in profit in 2024.

Net income advanced 2.2% to $22.9 billion from $22.4 billion, and diluted earnings per share edged up a fraction to $1.25.

The company announced a new $2 billion stock repurchase plan after completing a $9 billion buyback in 2023.

The company said it plans to pay a cash dividend of 36 U.S. cents for the fourth quarter, increasing its total payout to 87 U.S. cents in the year, compared to 61 U.S. cents in 2023. 

BAE Systems plc increased 1.3% to 1,354.0 pence after the defense company reported strong 2024 results. 

Glencore PLC dropped 7.5% to 328.60 pence, and the mining company reported a decline in earnings in 2024.

Philips NV plunged 10.5% to €24.26 after the Dutch medical device maker reported larger-than-expected losses in 2024.

MTU Aero Engines AG decreased 6.3% to €325.0, and the German engine maker said net income in the fourth quarter decreased to €143 million from €215 million a year ago.