European equities were mostly lower Friday, pressured by weaker-than-expected German economic data ahead of Federal Reserve Chair Jerome Powell’s highly anticipated speech at the Jackson Hole symposium.
As of 08:05 GMT, Germany’s DAX fell 0.1%, the U.K.’s FTSE 100 slipped 0.1%, while France’s CAC 40 gained 0.2%.
German Economy Contracts in Q2
Investor sentiment was weighed down by disappointing growth figures from Germany, the eurozone’s largest economy. GDP contracted 0.3% quarter-on-quarter in Q2, worse than the prior estimate of a 0.1% decline, following a 0.3% expansion in Q1. On an annual basis, GDP increased by only 0.2% after seasonal and calendar adjustments.
The statistics office also revised down GDP data for 2023 and 2024, leaving German output slightly below its 2019 level, highlighting a prolonged period of economic stagnation.
Focus on Powell and Central Bank Panels
Despite the weak data, losses were limited ahead of Powell’s keynote at Jackson Hole—his last as Fed chair—where investors are seeking signals on a potential September rate cut. European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey are also scheduled to speak on various panels.
Trade Deal Concerns
Market participants remain attentive to the EU-U.S. trade agreement signed late last month, which currently excludes the wine and spirits sector. European Union Trade Commissioner Maros Sefcovic emphasized that the door remains open for future negotiations, but warned, “I don’t want to say that it will be easy, regarding reaching agreement with U.S. on wines and spirits sector.”
Corporate Moves
In company news, Akzo Nobel (EU:AKZA) shares climbed after activist investor Cevian Capital disclosed a 3% stake, according to Dutch regulator AFM filings. French industrial gases firm Air Liquide (EU:AI) said it will acquire South Korea’s DIG Airgas from Macquarie Asia-Pacific Infrastructure Fund 2 for €2.85 billion. Meanwhile, Mediobanca (BIT:MB) shareholders rejected a plan to acquire Banca Generali (BIT:BGN), thwarting efforts to block a hostile takeover by Monte dei Paschi di Siena.
Oil Prices Eye Weekly Gains
Crude prices inched higher Friday, poised to end a two-week decline, as signs of stalled Russia-Ukraine peace talks added supply concerns. At 04:05 ET, Brent futures rose 0.2% to $67.77 a barrel, and WTI futures gained 0.2% to $63.66 a barrel. Both benchmarks had climbed more than 1% in the previous session, with Brent up 3% for the week and WTI up around 1.4%. The ongoing war in Ukraine continues to threaten Russian crude supply to global markets.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Leave a Reply