Economic news out of Europe was limited, as new car registrations,
French CPI, and Italian industrial production were the only reports
scheduled for release today. Euro zone new car registrations rose
6.8 percent for the year in June, compared to a drop of 1.3 percent
last month while in Western Europe, they rose to 4.5 percent from –1.3
percent. Registrations were expected to jump since car sales
accelerated 4.5 percent, a record for the month of June. French
CPI ascended, as expected, to 0.2 percent for the month of May and 1.7
percent for the year. Increases in the services PMI caused a
rise, but core CPI was held back by food, tobacco, and manufactured
goods. Additionally, Italian industrial production disappointed
to the downside yet again. The figure declined more than expected
by 1.0 percent for the month of May and –2.1 percent for the year,
compared to an outlook of –0.8 percent and –1.3 percent,
respectively. The disappointing numbers come as Italy fights to
emerge from recession while continually being hounded by high oil
prices that hurt consumer demand and corporate profits.
Currently, the euro trades at $1.2095 from a high of $1.2248 yesterday
afternoon in New York.
European equities worked their way back up on easing concerns that
profits for companies dependent on US sales may suffer, as the dollar
rebounded from a three-week low against the euro. The FTSE 100
and CAC 40 were both up 0.60 percent to 5,248.50 and 4,339.49,
respectively, while the DAX made a 0.36 percent gain to 4,669.97.
Philips, Europe’s biggest maker of consumer electronics advanced 2.1
percent to 22.45 euros as the company makes 23 percent of its sales in
The UK’s biggest mortgage lender, HBOS, climbed 1.89 percent to 891.00
pence after Goldman Sachs upgraded the company’s shares to
"outperform", citing the prospect of interest rate cuts, solid interim
results and robust loan growth underpinning UK banks.
The German 10-year bund yield rose 2 basis points to 3.234 on concerns
that signs of faster inflation in Euro zone, such as French CPI, may
reduce the chances of an interest-rate cut by the European Central Bank.