Euro markets welcomed September with losses of more than 1%

Losses of more than 1% welcomed the euro markets in September after the decline in August amid a climate of concern created by the interest rate hikes by central banks and the risk of recession.

In this climate, the pan-European Stoxx 600 recorded losses of 1.80% to 407.66 points, with all sectors closing in the red. At the same time, the other pan-European Stoxx 50 lost 1.75% to 3,455.85 points.

In the rest of the board, the German DAX fell 1.60% to 12,630.23 units, the British FTSE 100 the French also lost 1.86% to 7,148.50 points CAC-40 slipped 1.48% to 6,034.31 points.

The picture was similar in the region, as the Spanish IBEX – 35 closed at 7,806 units with a drop of 1.02% while the Italian FTSE MIB lost 1.19% to 21,302.16 points.

Federal Reserve Chairman Jerome Powell’s hawkish speech on inflation last Friday, followed by a barrage of statements from central bankers on both sides of the Atlantic about the need for big interest rate hikes to rein in inflation, have sent international stock markets into turmoil. . On Tuesday, meanwhile, New York Fed President John Williams called for a “somewhat restrictive policy to dampen demand.”

European markets completed four consecutive negative sessions yesterday, closing at lows for the day after data showed new record inflation at 9.1% in August. The new jump in inflation fueled expectations that next week’s ECB interest rate hike will be 75 basis points, instead of 50 basis points as in July.

Later in the day, data released today on the path of manufacturing activity showed that the sector continued to contract in August.

In particular, the S&P Global manufacturing PMI for the Eurozone fell in August to 49.6 points from 49.8 points, widening its distance from the 50 point level that separates expansion from contraction of activity. This is the lowest reading since June 2020.

Only three countries showed manufacturing PMI readings above 50, indicating expansion in activity in August. The Netherlands at 52 points (a 22-month low), Ireland at 51.1 points (also a 22-month low) and France at 50.6 points (a two-month high).

Better was Eurostat data which showed unemployment fell in July in Europe despite shocks to the European economy from the war in Ukraine and a rally in inflation.

In particular, the unemployment rate fell to 6.6% in July from 6.7% in June and 7.7% in July 2021. In the E.U. unemployment fell to 6% from 6.1% in June and 6.9% a year earlier, as Eurostat announced today.