Market Reactions to New Inflation Data in the UK and Investor Confidence in the German Economy
Market Reactions
The markets responded to the new inflation data for food in the UK, as well as to investor confidence in the German economy. This has caused fluctuations in major European stock exchanges, with investors closely analyzing the latest comments from the Federal Reserve Chairman Jerome Powell and new economic data from the region, as reported by CNBC.
European Stock Exchanges
The overall European benchmark, Stoxx 600, declined by 0.28% to 517.3 points. This decline reflects the cautious sentiment among investors as they navigate through the changing economic landscape and seek to make informed investment decisions.
Market Report: Stock Indices Decline
The DAX index reported a decrease of 0.39%, falling to 18,518.03 points. Meanwhile, the French CAC index erased 0.69% of its value, dropping to 7580.03 points. The British FTSE index also saw a decline of 0.22% to 8164.9 points.
Market reactions were influenced by new data on food inflation in the UK, which has cooled to its lowest level since September 2021. The annual rate of price increases in supermarkets has decreased to 1.6% in the four weeks to July 7 compared to a year earlier, according to data published by research company Kantar on Tuesday.
German Economy Faces Investor Confidence Decline
A recent report from the ZEW institute has revealed a decline in investor confidence in the German economy for the first time in a year. This comes as the industrial sector fails to keep up with the gradual recovery seen in other sectors. The ZEW expectations index dropped to 41.8 points in July from 47.5 points in June, according to data published on Tuesday. This is slightly higher than the forecasted 41 points by economists surveyed by Bloomberg. However, the measure for current conditions has improved.
European Stock Market Update
As of the end of regular trading on July 16, the main European stock indices showed mixed results.
According to new data from Eurostat, the surplus in international trade of goods in the Eurozone reached 13.9 billion euros in May. This is a significant increase compared to the 400 million euro trade deficit recorded in May 2023. Economists had predicted an even larger surplus of around 18 billion euros in the fifth month of this year.
For the entire European Union, the trade surplus has reached 9.7 billion euros, compared to a deficit of 2.6 billion euros a year earlier.
Traders are also paying close attention to…
Jerome Powell’s Comments on Federal Reserve Policy
Jerome Powell stated that the Federal Reserve will not wait for inflation to slow down to 2% before reducing interest rates, during a speech at the Economic Club of Washington.
The Impact on German Fashion Company Hugo Boss
Following a decrease in their sales forecast for the year, shares of the German fashion company Hugo Boss dropped by 7.5%.
The Challenge of Luxury Goods Market
The stock price of British luxury brand Burberry dropped by 5.2% in just one day, following the company’s profit warning due to weak demand for luxury goods.
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