European stocks rose today, Friday, on their way to achieving the best weekly performance since last November, with declines Futures For natural gas, the release of positive economic data, and the decline in inflation in the European single currency area (the euro) last month by more than expected.
The Stoxx 600 index of European shares rose 0.1 percent, bringing its weekly gains to 3.4 percent so far.
Shares of “Shell” rose 0.4 percent after the company said that the profits of its activities in the field of Natural gas It probably went up a lot in the fourth quarter of last year.
And the energy sector index gained 0.6 percent as crude prices rose thanks to hopes for a recovery in demand from China and data showing a decrease in fuel stocks in the United States after a winter storm that swept the country late last year.
European inflation fell
Inflation decreased Euro-zone Last December, more than expected but underlying price pressures rose which means that the ECB is likely to continue raising interest rates over the coming months.
Data published by the European Union’s statistics office (Eurostat) on Friday showed that the growth of consumer prices in the region, which increased the number of countries to 20 with the accession of Croatia to it on January 1, slowed to 9.2 percent in December, compared to 9.2 percent in December. 10.1 percent in the previous month. The rate came in below expectations of a rise of 9.7 percent in a Archyde.com poll.
However, this apparently good data hides with it not so good details as the bulk of the decline was due to lower energy prices while all the main components of core inflation increased.
The inflation rate, which excludes volatile food and energy prices, rose to 6.9 percent from 6.6 percent, while a more restrictive measure that also excludes alcohol and tobacco prices rose to 5.2 percent from five percent.
Accelerating inflation in services and non-energy industrial goods, which are closely monitored by the European Central Bank to gauge the continuity of price growth, heightened fears that dealing with higher prices will be more difficult than expected.
The problem is that the longer price growth continues, the more difficult it is to curb it, as firms begin to adjust their pricing and wage policies, which in turn perpetuates inflation.
European economic sentiment rose
Data from the European Commission, Friday, January 6, showed that economic sentiment in the eurozone improved in December 2022 for the first time since the start of the war in Ukraine, amid more optimism in all sectors of the economy and a sharp decline in inflation expectations.
The Commission’s monthly index rose to 95.8 points in December, compared to 94 points in November, marking the first rise since it fell from the record level of 114 points it hit in February, the month in which Russia launched the war on Ukraine.
Sentiment in the industry improved to minus 1.5 versus minus 1.9, and it more than doubled in the services sector to 6.3 versus 3.1, and optimism increased among consumers, retailers and workers in the construction sector, indicating that the expected economic slowdown for the last quarter of 2022 and the first of 2023 It will probably be slight.
Consumers’ expectations for inflation over the next 12 months fell sharply in December to 23.7 points from 29.9 points in November, and manufacturers’ expectations for selling prices fell to 38.4 points from 40.4 in November.
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The rise in gold prices
And gold prices rose on Friday, heading for a third consecutive weekly gain, before the issuance of the positive jobs report in the United States, which is very important for determining the position of the Federal Reserve (the US central bank) regarding raising interest rates.
Gold rose in spot trading 0.3 percent to 1838.38 dollars an ounce, and prices increased about 0.8 percent during the week.
US gold futures rose 0.2 percent to $1,843.80.
Market focus shifts to non-farm payrolls data due to be released by the US Labor Department on Friday.
Benchmark 10-year bond yields fell on the day. A few US central bank officials on Thursday confirmed their commitment to the fight to bring inflation down to the 2 percent target, but St. Louis Federal Reserve Chairman James Bullard said 2023 could finally see some relief in the fight against inflation. High interest rates reduce the attractiveness of the yellow metal, which is a hedge against inflation but does not yield a return.
Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell to a three-month low last week, indicating a labor market remains scarce and may keep the US central bank on a path of sharp interest rate hikes.
“Labor market weakness is just around the corner, and until that happens, gold may remain stuck above the $1,800 level,” Edward Moya, senior analyst at OANDA, said in a note.
As for other precious metals, silver rose in spot trading 0.4 percent to 23.30 dollars, while platinum increased 0.2 percent to 1060.63 dollars, and palladium fell 0.2 percent to 1,741.43 dollars. The three metals are heading for a weekly decline.
The dollar’s rise supports Japanese stocks
On the other hand, the Japanese Nikkei index compensated for its early losses, to close higher on Friday, as investors repurchased declining stocks with the decline of the yen against the dollar. The Nikkei closed up 0.59 percent at 25,973.85 points, after it started trading on a decline affected by the decline of “Wall Street” at the end of trading during the night, and the index lost 0.46 percent over the course of the week that included several holidays.
The broader Topix index rose 0.37 percent to 1875.76, but lost 0.84 percent during the week.
Chihiro Ota, assistant general manager of investment research and investor services at SMBC Nikko Securities, said, “The rise of the yen against the dollar since the Bank of Japan (central) policy adjustment affected investor sentiment, but the trend changed yesterday.” He added, “Some investors repurchased shares, as some of them seemed cheap in light of the yen’s decline.”
Nikier rose, supported by heavyweights, as chip and device maker Tokyo Electron jumped 3.51 percent, technology investment group SoftBank rose 1.24 percent, and Daiichi Sankyo Pharmaceuticals rose 3.51 percent.
Shares of the “Sony” group rose 2.41 percent, and “Honda Motor” shares rose 1.93 percent.
The shipping companies index jumped 3.27 percent, registering the best performance among the 33 sub-indices on the Tokyo Stock Exchange.