- European equity indexes closed broadly lower on Friday after EU inflation rebounded.
- The end of EU energy subsidies bodes poorly for ECB rate cut expectations.
- US jobs data likewise firms up US economic backdrop, reducing odds of Fed cuts.
European equity indexes shed weight on Friday, plunging on a rebound in Eurozone inflation figures while the US’ Nonfarm Payrolls (NFP) solidly steamrolled forecasts, adding the most jobs since October while markets were expecting a slight fallback in the headline jobs figure.
The European Harmonized Index of Consumer Prices (HICP) rose to 2.9% for the year ended December, slightly less than the market forecast of 3.0% but still a healthy rebound from the previous period’s 2.4%. Annualized Core HICP ticked lower to 3.4% in December, down slightly from November’s YoY 3.6% and missing the forecast 3.5%, highlighting how much of Eurozone inflation is being driven by rising energy prices. EU subsidies meant to cap energy volatility are expiring, and the added price growth will plague EU inflation looking forward, making it more difficult for the European Central Bank (ECB) to cut interest rates.
See More: Euro area HICP inflation rises to 2.9% in December vs. 3% expected
European equities plunged to near-term lows after headline EU inflation ticked higher, sending the German DAX index to a four-week low of €16,434. European indexes recovered from early Friday’s inflation plunge before getting yanked lower again by US NFP figures that thoroughly trounced expectations.
Friday’s NFP print showed the US added 216K net job additions to the American employment landscape, easily clearing the median market forecast of 170K, and stepping over November’s revised print of 173K (revised down from 199K). Investors will also note that October’s NFP print saw further revisions, declining to 105K from the previous 150K).
Germany’s DAX ended the week at €16,594.21, down a little over 23 points to end Friday down 0.14%, while the French CAC 40 fell nearly 30 points to close down 0.4% at €7,420.69. The pan-European STOXX600 fell 1.3 points to end at €476.38, down around a quarter of a percent. London’s FTSE index also slid four-tenths of one percent to close down 33.46 points at £7,689.61.
DAX Technical Outlook
The German DAX 40 major equity index fell on Friday, and efforts by stock traders to bolster stocks back from the day’s lows saw a late break back below the €16,600 level heading into the Friday closing bell.
The DAX kicked off 2024 with an early rally into €16,950 as investors keep an eye turned to the major 17,000 handle, but the equity index continues to get dragged below the 200-hour Simple Moving Average (SMA) near €16,700.
Despite near-term congestion and a bearish lean to technical indicators on the daily candlesticks, the DAX remains well-bid from late 2023’s lows, up nearly 13.5% from late October’s bottom near €14,620.
DAX Hourly Chart
DAX Daily Chart
DAX Technical Levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats from daily highs, holds above 1.0800
![EUR/USD retreats from daily highs, holds above 1.0800](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-59004818_XtraSmall.jpg)
EUR/USD loses traction but holds above 1.0800 after touching its highest level in three weeks above 1.0840. Nonfarm Payrolls in the US rose more than expected in June but downward revisions to May and April don't allow the USD to gather strength.
GBP/USD struggles to hold above 1.2800 after US jobs data
![GBP/USD struggles to hold above 1.2800 after US jobs data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/british-banknotes-14144912_XtraSmall.jpg)
GBP/USD spiked above 1.2800 with the immediate reaction to the mixed US jobs report but retreated below this level. Nonfarm Payrolls in the US rose 206,000 in June. The Unemployment Rate ticked up to 4.1% and annual wage inflation declined to 3.9%.
Gold approaches $2,380 on robust NFP data
![Gold approaches $2,380 on robust NFP data](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/stack-of-golden-bars-in-the-bank-vault-60756080_XtraSmall.jpg)
Gold intensifies the bullish stance for the day, rising to the vicinity of the $2,380 region following the publication of the US labour market report for the month of June. The benchmark 10-year US Treasury bond yield stays deep in the red near 4.3%, helping XAU/USD push higher.
Crypto Today: Bitcoin, Ethereum and Ripple lose key support levels, extend declines on Friday
![Crypto Today: Bitcoin, Ethereum and Ripple lose key support levels, extend declines on Friday](https://editorial.fxstreet.com/images/Markets/Currencies/Digital%20Currencies/Bitcoin/Bitcoin_2_XtraSmall.jpg)
Crypto market lost nearly 6% in market capitalization, down to $2.121 trillion. Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) erased recent gains from 2024.
French Elections Preview: Euro to “sell the fact” on a hung parliament scenario Premium
![French Elections Preview: Euro to “sell the fact” on a hung parliament scenario](https://editorial.fxstreet.com/images/Macroeconomics/Countries/Europe/Eurozone_countries/France/pantheon-paris-with-french-flag-8748101_XtraSmall.jpg)
Investors expect Frances's second round of parliamentary elections to end with a hung parliament. Keeping extremists out of power is priced in and could result in profit-taking on Euro gains.