The euro markets moved down in the session on Friday (21/6), as investors followed several decisions of the central bank, as well as economic data published.
The pan-European Stoxx 600 fell by 0.31% to 517.28 points, with movements lowered. Retail and technology stocks led the losses, both falling 0.5%.
In terms of major European indices, Germany’s DAX fell 0.22% to 18,199.55, Britain’s FTSE 100 fell 0.32% to 8,244.28 and France’s CAC 40 fell 0.30% to 7,648. Regionally, Italy’s FTSE MIB was down 0.73% at 33,430.00, Spain’s IBEX 35 was down 0.52% at 11,102.00, while Portugal’s PSI was down 0.68% at 6,605.47.
Markets have been largely negative over the past week, following the rise of far-right parties in European elections. Even France’s CAC 40 is headed for weekly gains, although the announcement of the country’s election has weakened the index to some extent. The euro remained depressed as investors braced for a possible far-right victory in the eurozone’s second-largest economy.
The volatility of options prices suggests that investors will see more risk from France than Britain, after the upcoming election, as stated by Reuters.
The focus, this week, is on the actions of central banks, with National Bank in Switzerland to announce a rate reduction of 0.25 percentage points to 1.25%. The SNB became the first major central bank to cut interest rates this cycle.
The Bank of England kept interest rates unchanged at a 16-year high of 5.25%. Economists noted a “soft” tone in the latest messages from policymakers, citing a “dangerous balance” that led to the decision not to cut.
Data released Friday in Britain showed retail sales rose 2.9% in May, beating expectations for a 1.5% increase, recovering from a poor performance in April.
“After a slow start to the year, retailers can be relieved to see a recovery in retail sales for the summer – a time when major sporting events, from EURO leading up to the Olympics, they are expected to improve the shopping environment as well,” said Deann Evans, EMEA managing director of Shopify.
Friday also saw French business confidence data, which remained flat for a third consecutive month, as well as German and UK flash purchasing managers’ index data for manufacturing and services.