Eurozone Inflation Edged Up to 2%, Germany's Jobless Count Held at Decade High

Bridgette Randall
01 Jul, 2025
London

European markets edged down on the first day of the second half, and  investors remained focused on the ongoing trade negotiations with the U.S. 

The European Union's negotiators are looking to avert tariffs on pharmaceuticals and commercial aircrafts ahead of the U.S. deadline of July 9. 

Moreover, EU negotiators are likely to uphold tough standards on U.S. food products amid worries of higher level of food chemicals and genetically modified varieties. 

 

EU Consumer Price Inflation Edged Higher to 2%

On the economic front, consumer price inflation in the eurozone edged higher to 2% from an eight-month low of 1.9% in May, according to the latest data released by the Eurostat. 

The slowdown in energy price inflation to 2.7% from 3.3% was overwhelmed by the slight acceleration in service inflation to 3.3% from 3.2% in May, respectively. 

Core inflation, which excludes food and energy prices, was unchanged at 2.3%. 

 

Germany's Job Seekers Approach Decade-High 3 Million

Germany's seasonally adjusted jobless rate held at 6.3% in June, according to the Federal Statistical Office or Destatis. 

The jobless rate held for the fourth month in a row, and remained highest since September 2020.      

The number of jobseekers increased by 11,000 to 2.97 million, the highest in a decade.

 "The labour market continues to show signs of economic weakness. Unemployment continues to develop unfavorably. 

And companies remain reluctant to hire," said labor office head Andrea Nahles.

 

Europe Indexes and Yields

The DAX index decreased by 0.6% to 23,762.53, the CAC-40 index edged lower 0.4% to 7,631.11, and the FTSE 100 index declined 0.3% to 8,738.06.

The yield on 10-year German bonds inched lower to 2.55%, French bonds decreased to 3.24%, the UK gilts moved down to 4.43%, and Italian bonds edged lower to 3.46%.

The euro increased to $1.18; the British pound was higher at $1.37; and the U.S. dollar was lower and traded at 79.00 Swiss cents.

Brent crude increased $0.49 to $67.23 a barrel, and the Dutch TTF natural gas was higher by €0.57 to €33.63 per MWh.

 

Europe Movers

Defense stocks declined following a surge in June. 

Safran SA decreased 2.4% to €269.20, Airbus SE dropped 2.4% to €173.04, Dassault Aviation SA fell 2.2% €293.40, BAE Systems edged up 0.1% to 1,888.76, Rolls-Royce PLC fell 0.8% to 959.80 pence. 

Luxury and fashion stocks traded higher amid optimism about the possible trade deal with the U.S. 

LVMH added 3.4% to €459.70, Kering SA gained 4.2% to €192.44, Hermes International SCA edged up 0.2% to €2,303.0, Moncler SpA advanced 1.5% to €49.18.