50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

European stocks lower; German PPI unlikely to stop ECB hike

Published 11/21/2022, 05:20 PM
© Reuters.
EUR/USD
-
UK100
-
XAU/USD
-
FCHI
-
DE40
-
BAER
-
CPG
-
GC
-
LCO
-
CL
-
ABI
-

By Peter Nurse 

Investing.com - European stock markets traded lower Monday as investors fretted over the likelihood of future monetary tightening and the impact on future economic growth.

At 03:55 ET (08:55 GMT), the DAX index in Germany traded 0.5% lower, CAC 40 in France fell 0.3% and the FTSE 100 in the U.K. dropped 0.3%.

Recent lower-than-expected U.S. consumer and producer inflation prints had boosted global markets on hopes that the U.S. Federal Reserve would pivot away from aggressive interest rate hikes.

German producer prices fell unexpectedly on the month in October, data showed Monday, dropping 4.2% on the month, compared with expectations for a rise of 0.9%.

This is good news, but still pales alongside the annual reading of Eurozone inflation which soared past 10% at the end of last month, up from 9.9% in September. 

European Central Bank President Christine Lagarde said on Friday that interest rates will need to be lifted to levels that restrict economic expansion in order to combat inflation at those uncomfortable levels.

With this in mind, minutes from the ECB meeting and the Fed later this week will provide markets with more direction on the outlook for interest rates.

In corporate news, Compass Group (LON:CPG) stock fell 2.5% after the caterer warned that operating margins are unlikely to improve next year as it battles inflationary pressures. 

That said, the company increased its annual dividend and announced a new buyback of £250 million (£1=$1.1818), at the end of a year in which revenue rose by 42% and underlying operating profit rose 87%.

Julius Baer (SIX:BAER) stock rose 0.1% after the Swiss lender said it was on track to reach its 2022 profitability targets, despite "challenging market" conditions taking a big bite out of its assets under management.

Anheuser Busch Inbev (EBR:ABI) stock fell 0.2% after Friday’s late decision by FIFA authorities to ban the sale of alcohol, primarily its Budweiser brand, at the stadiums as the Qatar soccer World Cup got underway on Sunday. 

Oil prices fell to near two-month lows Monday, weighed by demand concerns from China as COVID concerns in the biggest crude importer in the world increased.

New COVID case numbers in China remained close to the highs seen in April, while the country saw its first Covid-related death in almost six months on Saturday and another two were reported on Sunday.

By 03:55 ET, U.S. crude futures traded 0.5% lower at $79.75 a barrel, while the Brent contract fell 0.8% to $86.94. 

Both benchmarks closed Friday at their lowest since Sept. 27, with the U.S. contract down 10% and Brent 9% lower, the biggest weekly decline since August. 

Additionally, gold futures fell 0.6% to $1,743.45/oz, while EUR/USD traded 0.7% lower at 1.0255.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.