The European markets closed in the ‘red’ – EDF fell more than 14%

The European markets closed lower on Friday, as some aggressive statements by Federal Reserve and ECB executives on inflation have revived speculation that central banks will soon launch a policy tightening.

In statements on Thursday, several Fed officials appeared ready to start raising interest rates from March in order to address the price rally. Lael Brainard, President Biden’s choice for the second highest position in the Federal Reserve, said yesterday in Congress, at a hearing on her position, that inflation is very high and reducing it is a key priority of the central bank. The latest US inflation data showed an annual jump of 7% in December, the highest level in about 40 years.

In this climate, the pan-European Stoxx 600 recorded losses of 1.01% to 481.16 points. At the same time, the other pan-European Stoxx 50 lost 1.01% to 4,272.19 points.

On the rest of the board, the German DAX fell 0.93% to 15,883.24 points, the French CAC-40 lost 0.81% to 7,143 points, and the British FTSE 100 fell 0.28% to 7,542.95 points.

In the periphery the Italian FTSE MIB slipped 1.08% to 27,543.96 points, while the Spanish IBEX 35 lost 0.12% to 8,806.60, after data showed that annual inflation climbed to 6.5% in December, the highest level since 1992.

Back to Europe, Christine Lagarde said today that inflation in the eurozone will fall from record levels and the European Central Bank is ready to take all necessary measures to reduce it to the 2% target.

“Our commitment to price stability remains unwavering,” she said in a statement. “We understand that rising prices are a concern for many people and we take this concern very seriously,” Lagarde said.

Meanwhile, European Central Bank Vice President Luis de Guidos said on Thursday that the jump in inflation in the Eurozone was not proving to be as temporary as expected, and warned that the rise in prices this year would exceed forecasts.

In business developments, the French energy company EDF fell 14.59% following the decision of the French government to order the state-owned company to sell to smaller competitors a part of the cheaper nuclear energy it produces, in order to limit the increases in the prices of electricity.

In macro, despite the recovery of the German economy in 2021, the country failed to return to pre-pandemic level, as shortages of semiconductors hit production in the automotive industry and further coronavirus restrictions slowed the growth of Europe’s largest economy .

Particularly, Germany’s GDP increased by 2.7% in 2021, after a “dip” of 4.6% recorded in the first year of the coronavirus crisis, according to preliminary data released earlier by the Federal Statistical Office of the country. of economists in a Reuters poll.

Alongside, the British economy increased by much stronger than expected in November (by 0.9%), and was higher than the level before the pandemic, said the statistical service ONS.

The fifth largest economy in the world was 0.7% larger than it was in February 2020, the ONS said. Economists polled by Reuters forecast monthly GDP growth of 0.4% in November.

End, the Eurozone recorded Small trade deficit in November from a high surplus 12 months earlier due to rising costs of imported oil and gas, according to data from the European Union statistical office, published on Friday. According to Reuters, Eurostat announced that the non-adjusted trade deficit of the 19 countries sharing the euro was 1.5 billion euros ($ 1.7 billion) compared to a surplus of 25 billion in November 2020. Payments for imports increased by 32.0%, while export earnings increased by only 14.4%.