Major European indices were mixed on Monday as investors digested inflation data from some of the region’s largest economies on a quiet day due to bank holidays in the UK and US
The German DAX traded 0.24% lower at 15,481 at 11:45 a.m. local time after reaching an all-time high the previous week. France’s CAC was largely flat and at the same time was trading at 6,488 in Paris.
The Swiss SMI remained just as flat as the Italian FTSE MIB with an increase of only 0.3% to 25,249. It’s a public holiday in the UK when the FTSE 100 is closed.
The German index was dragged nearly 2% by Deutsche Bank, whose share price was trading in negative territory, after reports the US Federal Reserve was concerned about the German lender’s anti-money laundering practices.
Inflation data was also released on Monday for countries like Spain, which had the highest inflation rate in four years. Consumer prices rose 2.4% year over year in May. This comes from flash data from the country’s National Statistics Institute.
Meanwhile, France will start Covid-19 vaccinations for anyone over the age of 18 on Monday.
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Although the day started largely in the green, late morning European markets lacked direction as some Asian markets declined as China reported a slowdown in production growth due to higher commodity prices.
In the meantime, US markets are closed for Memorial Day weekend.
OECD increases forecasts
The OECD’s latest economic outlook, released on Monday, brought some good news for the euro area. His report, titled “No Ordinary Recovery,” states that the global economic outlook is brightening, but in very uneven ways. For the global outlook as a whole, the organization predicts gross domestic product (GDP) growth of 5.8% in 2021, compared to a decrease of 3.5% in 2020. It forecasts 6.3% growth for the G20 group Industrialized countries and 4.3% for the euro area.
However, it added that despite encouraging signs of health and economic recovery, there are some significant headwinds, namely not enough vaccines for developing countries.
There is hope that US employment numbers for May will show a comeback in recruitment, indicating an ongoing global recovery. The dollar is holding a two-month high and gold is above a key level of $ 1,900 as investors pour into the currency as an inflation hedge. US core inflation surged above the Federal Reserve’s target on Friday.
In other news, OECD Secretary General Angel Gurria’s term of office ends on Monday, and NATO chief Jens Stoltenberg is due to briefly brief the press ahead of a meeting of foreign and defense ministers.
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