By Sara Sjolin and Carla Mozee, MarketWatch German bond yield
hits fresh all-time low
LONDON (MarketWatch) -- A raft of economic data out on Thursday
offered much-needed good news for Europe, helping send regional
stock indexes higher almost across the board.
But shares in oil majors slumped after the members of the
Organization of the Petroleum Exporting Countries agreed not to cut
the group's existing production target.
Economic data: Germany's unemployment rate unexpectedly fall to
a record post-unification low of 6.6% in November, while the number
of jobless people fell by 14,000. The figures confirm that the
German labor market has been able to weather the latest bout of
sluggishness, in which the country's manufacturing sector was
especially hard hit by global geopolitical concerns and by
sanctions on Russia.
In Spain, data showed the economic recovery continued in the
third quarter as gross domestic product for the period rose 0.5%
quarter-on-quarter and 1.6% on the year. Both readings were in line
with flash estimates. And in Italy, manufacturing business
confidence rose for a second month in a row, boosted by better
order expectations from manufacturers of consumer and industrial
goods.
However, consumer-price numbers revealed that Spain slipped
further into deflation in November, with prices falling for a fifth
straight month. Belgian consumer prices in November also fell
further, down by 0.11%. Data released during midafternoon trade
showed German inflation in November slowed to 0.5%, matching an
estimate from HSBC.
European Central Bank President Mario Draghi, at a speech before
the Finnish Parliament in Helsinki, reiterated that policy makers
are committed to enacting additional measures "within its mandate"
to address the risks of persistently low inflation levels.
He noted eurozone inflation in October stood at a low rate of
0.4%, and considering the recent slide in oil prices, "and taking
into account prevailing futures prices for energy, inflation is
expected to remain at around current low levels over the coming
months, before increasing gradually during 2015 and 2016."
On Friday, investors will watch for eurozone-wide inflation data
that are expected to show consumer prices grew by 0.3% this
month.
Market reaction: The Stoxx Europe 600 index added 0.4% to
347.48, although it briefly pared gains after OPEC's decision to
keep oil production unchanged at 30 million barrels a day.
Germany's DAX 30 index rose 0.6% to 9,975.02, setting it on
track for a 7% gain for November. Such a monthly rally would be the
biggest since January 2012. After the in-line German-inflation
print, the euro (EURUSD) bought $1.2490, compared with Wednesday's
level around $1.2514.
The U.K.'s FTSE 100 index slipped 0.1% to 6,726.25, weighed by
oil majors.
France's CAC 40 index was up 0.3% at 4,385.99. The index didn't
open at the usual time Thursday due to a technical problem. Read:
Four European stock indexes resume trading after glitch
Meanwhile, Greek stocks fell, with the Athex Composite down 2.6%
at 950.95. Greece's international creditors are considering a
six-month extension of Greece's bailout program after negotiations
with the country's officials here failed to reach an agreement.
Bonds: German government bonds rallied, sending the yield on the
10-year bond to just 0.700%, below the previous all-time low of
0.719% hit in October, according to Tradeweb. The 10-year French
government bond slumped too, falling below 1% for the first time
ever, while the 10-year U.K. Gilt was also lower, at around
1.93%.
Oil stock blues: The OPEC meeting pulled on oil futures and oil
providers alike. Crude for January (CLF5) tanked $2.74, or 3.8%, to
$90.95 a barrel. BP PLC (BP) lost 2.4%, Royal Dutch Shell PLC
(RDSB) dropped 3.8%, Total SA slid 3.2% and Petrofac Ltd. gave up
6.1%.
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This event is free, but RSVPs are required. It will be held
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