European Equity Benchmarks Close Flat

The broad-based major European indices were relatively unchanged in Thursday’s trading session, as the London and Frankfurt exchanges edged lower, while the French bourse saw slight gains.

In economic news, euro area annual inflation is expected to be 2.0% in February, up from 1.8% from the previous month, according to Eurostat, the statistical office of the European Union. Energy is expected to have the highest annual rate in February, followed by food, alcohol & tobacco, services, and non-energy industrial goods.

Meanwhile, the euro area (EA19) unemployment rate was 9.6% in January, which was flat compared to the previous month, and down from 10.4% in January 2016. It is the lowest rate recorded in the euro area since May 2009. The EU28 unemployment rate was 8.1% in January 2017, down from 8.2% in December 2016, and 8.9% in January 2016. It is the lowest rate recorded in the EU28 since January 2009.

Eurostat also reported that in January, compared with December 2016, industrial producer prices rose 0.7% in the euro area (EA19) and 0.8% in the EU28. In December 2016, prices increased 0.8% in the euro area and 0.9% in the EU28. In January 2017, compared with January 2016, industrial producer prices rose 3.5% in the euro area and 4.3% in the EU28. Industrial producer prices rose in all Member States. The largest increases were observed in Malta (+2.3%), Belgium (+2.1%), Spain (+1.8%) and Portugal (+1.7%).

In the U.K., household incomes won’t grow over the next two years, according to a report from the Institute for Fiscal Studies. “If workers’ earnings grow in line with the OBR’s [Office for Budget Responsibility] forecast, we project that real median income growth will be close to zero over the next two years,’ said the report. “The main reason is that real earnings growth tends to benefit high-income households more than low-income households.”

In Germany, the Federal Statistical Office (Destatis) reported that the index of import prices increased 6.0% in January, compared with the same month last year. It was the highest increase of a yearly rate of change since May 2011 (+6.3%). The index of import prices, excluding crude oil and mineral oil products, increased 3.0% compared with the level of a year earlier. The index of export prices rose 1.8% in January, compared with January 2016.

In equities, Capita, a provider of business process management serivces, led the FTSE lower in London, falling 9.1%, followed by electronics retailer Dixons Carphone, and broadcaster ITV, which dropped 3.6% and 3.5% each. Medical technology group ConvaTec Group led the gainers on the FTSE, rising 5.1%, followed by chemicals maker Croda International, and Irish conglomerate DCC, which were up 3.2% and 1.9%.

In Frankfurt, industrial conglomerate ThyssenKrupp led the DAX lower, falling 1.7%, followed by telecommunications provider Deutsche Telekom, and chemicals company Linde, which declined 1.2% each. Airline operator Deutsche Lufthansa closed 0.9% lower.

And in Paris, electricity and gas supplier Engie helped nudge the CAC into positive territory, surging 8.2%, followed by environmental management services provider Veolia Environnement, and consulting and outsourcing firm Cap Gemini, which rose 2.6% and 1.4% each. Aerospace and defense company Safran gained 1.2%.