European Equity Benchmarks Close Lower, Banks Burden Markets; Euro Area Inflation Flat

European Equity Benchmarks Close Lower, Banks Burden Markets; Euro Area Inflation Flat

The broad-based major European indices closed lower in Thursday’s trading session, as banks weighed on markets.

In economic news, Euro area annual inflation was 1.3% in July, flat compared with June, according to Eurostat, the statistical office of the European Union. In July, the rate was 0.2%. European Union annual inflation was 1.5% in July, which was also flat compared to June. A year earlier the rate was 0.2%.

Eurostat also reported that euro area (EA19) exports of goods to the rest of the world in June 2017 was EUR187.2 billion ($219.6 billion), an increase of 3.9% compared with June 2016. Imports from the rest of the world stood at EUR160.7 billion, a gain of 6.2% compared with June 2016. As a result, the euro area recorded a EUR26.6 billion surplus in trade in goods with the rest of the world in June, compared with EUR28.9 billion in June 2016.

Meanwhile, the U.K.’s Office for National Statistics ( ONS ) reported that retail sales increased by 0.3% in July, compared with the previous month, due to strong sales in food stores. All other sectors except food and household goods stores declined on the month for the quantity bought in retail sales. The quantity bought increased by 1.3% compared with July 2016; the 51st consecutive year-on-year increase in retail sales since April 2013. Online sales increased year-on-year by 15.1%, and by 0.3% on the month, accounting for approximately 16.0% of all retail spending.

In Germany, the Federal Statistical Office (Destatis) reported that employment continued to increase in Q2. The number of people in employment in Germany was 44.2 million, which was well above the previous year’s level. Compared with the second quarter of 2016, the number of persons in employment increased by 664,000. As in Q1, the growth rate was 1.5%.

Compared with Q2 of 2016, the number of employees increased by 690,000 (+1.8%) to 39.9 million in Q2 of 2017. However, the number of self-employed including family workers decreased by 26,000 ( 0.6%) to 4.3 million in the same period.

In France, the National Institute of Statistics and Economic Studies (INSEE) reported that the Q2 unemployment rate in metropolitan France and the overseas departments (excluding Mayotte) stood at 9.5% of the active population, down from after 9.6% in Q1.

In equities, banks pushed the FTSE into negative territory in London as Standard Chartered, Royal Bank of Scotland, and Barclays fell 2.7%, 2.2%, and 1.7% respectively. Leading all decliners were home improvement products supplier Kingfisher, and investment company Standard Life, which declined 4.1% and 3.8% respectively.

In Frankfurt, Deutsche Bank and Commerzbank led the DAX lower, falling 3.2% and 2.9%, respectively, followed by construction materials supplier HeidelbergCement, down 1.4%, and postal services provider Deutsche Post off 1.1%. Footwear and apparel retailer Adidas, shed 0.9%, while Siemens and ThyssenKrupp AG each closed 0.8% lower.

And in Paris, banks also weighed down the CAC as Societe Generale, Credit Agricole, and BNP Paribas fell 2.3%, 2%, and 1.6% respectively. Steel and mining company ArcelorMittal led all decliners, dropping 2.9%. Communication company Nokia lost 1.3% and building materials supplier Cie de Saint-Gobain shed 1.2%, while airplane manufacturer Airbus was off 1%.

The FTSE fell 0.61%, the DAX dropped 0.49%, and the CAC-40 lost 0.57%.

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