European equities extend gains, though euro under pressure

Tuesday, May 13, 2014

European equity markets extended gains today despite the euro continuing to remain under pressure. The DAX, CAC, IBEX and the London benchmark index gained between 0.2% and 0.55%.

On the macroeconomic front, the US retail sales rose slightly by 0.1% in April compared to 0.4% initially expected, while import prices fell by 0.4% and export prices plunged by 1% in April, both missing analysts’ expectations. However, the US dollar edged higher against the euro, while the USD index climbed above 80.0, showing signs strong upside momentum following the recent uptrend.

Furthermore, the tepid Chinese economic data verified the slowdown in the Chinese economy and weighed on risk appetite. Chinese industrial output rose by 8.7% y/y in April, missing analysts’ estimates of an 8.9% rise, while retail sales increased by 11.9% y/y in April against expectations of a 12.2% increase.

Pharmaceutical stocks led the London equity market higher today as AstraZeneca jumped by 0.7% following an announcement from the company’s CEO Pascal Soriot who reported that the UK pharmaceutical company is big enough to succeed on its own, following the recent bids from the US competitor Pfizer. Shire and GlaxoSmithKline have also posted gains, rising by 1.8% and 1%, respectively.

Tomorrow, investors will be watching closely the release of Eurozone’s industrial production data as well as UK ILO unemployment rate and German CPI inflation figures. The euro has remained under pressure, trading near a 5-week low against the US dollar, around the 1.370 area. 

EUR Spot 

EUR Curncy (Euro Spot )  Daily 13 2014-05-13 17-22-24

More from: Myrto Sokou