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European Equity Benchmarks Close Lower; Euro Area Inflation Rises to 1.0%, Unemployment Drops to 7.5%

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Last updated: 11/29/2019 13:04:26

01:04 PM EST, 11/29/2019 (MT Newswires) -- The broad-based major European indices closed lower in Friday trading as financial and automotive stocks weighed down the markets.

In economic news, euro area annual inflation is expected to be 1.0% in November, up from 0.7% in October, according to a flash estimate from Eurostat, the statistical office of the European Union. Among the main components of euro area inflation, food, alcohol and tobacco is expected to have the highest annual rate in November, followed by services, non-energy industrial goods, and energy.

Eurostat also reported that he euro area (EA19) seasonally-adjusted unemployment rate was 7.5% in October, down from 7.6% in September and 8.0% in October 2018. It is the lowest rate recorded in the euro area since July 2008. The EU28 unemployment rate was 6.3% in October, unchanged from September, but down from 6.7% in October 2018. It remains the lowest rate recorded in the EU28 since the start of the EU monthly unemployment series in January 2000.

Eurostat estimates that 15.583 million men and women in the EU28, of whom 12.334 million in the euro area, were unemployed in October. Compared with September, the number of unemployed decreased 29,000 in the EU28 and 31,000 in the euro area. Compared with October 2018, unemployment fell 939,000 in the EU28 and 761,000 in the euro area.

The lowest unemployment rates in October were in Czechia (2.2%), Germany (3.1%) and Poland (3.2%), while the highest unemployment rates were in Greece (16.7% in August 2019) and Spain (14.2%). Compared with a year ago, the unemployment rate fell in 24 member states, while it increased in Czechia, Lithuania, Denmark, and Sweden. The largest decreases in unemployment were in Greece and Estonia.

In Germany, turnover in retail trade in October was in real terms 0.8% and in nominal terms 1.0% larger than in October 2018, according to provisional data from the Federal Statistical Office (Destatis). Compared with the previous year, turnover in retail trade was in real terms 2.8% and in nominal terms 3.4% higher in the first 10 months of 2019 than in the same period the previous year. When adjusted for calendar and seasonal variations, October turnover was in real and nominal terms 1.9% lower than in September.

Destatis also reported that 45.4 million people resident in Germany were in employment in October. Compared with October 2018, the number of employed increased 0.7%, or by 306,000. Compared with the previous month, the number employed increased 90,000 (+0.2%).

In France, the consumer price index (CPI) is expected to accelerate to +1.0% in November, after rising 0.8% in the previous month, according to a provisional estimate from the Institute for Statistics and Economic Studies (INSEE). Consumer prices are expected to rise 0.1%, after being flat in October. Tobacco prices are expected to increase sharply due to a tax increase, and energy prices are expected to rise slightly due to a rebound over one month in gas prices. Food prices are expected to rebound very moderately, however, prices of services are expected to drop a little more than in the previous month, while those of manufactured goods are expected to edge slightly lower.

In Italy, the CPI was unchanged in November on monthly basis, and increased 0.4% from November 2018, according to preliminary estimates from the Italian National Institute of Statistics (Istat). The slight acceleration was mainly due to prices of processed food including alcohol, non-durable goods, and durable goods, which was partially offset by the decrease of prices of transport services. Both core inflation (excluding energy and unprocessed food) and inflation excluding energy were +1.0%, up from +0.7% during the year-ago month.

Istat also reported that the country's employment rate increased 0.2% in October to 59.2%. The increase of employment involved both men and women with growth seen among those over 35, and a slight decrease for those aged 25-34. Meanwhile the number of unemployed declined 1.7%, which was due to a sharp drop among men. The unemployment rate dropped to 9.7%, and the youth rate decreased to 27.8%.

And in Spain, the annual inflation of the CPI in November was 0.4%, according to the flash estimate from the Spanish Statistical Institute (INE). If confirmed, it would imply an increase of three tenths in the annual rate. INE said there were price increases for fuels, food and non-alcoholic drinks.

In equities, Tesco supermarket operator J Sainsbury and wealth management firm St James's Place led the FTSE lower in London falling 3.4% and 3% respectively, followed by home improvement retailer Kingfisher and home builder Berkeley Group, which lost 2.7% each. Royal Bank of Scotland Group and Lloyds Banking Group dropped 2.5% each, while financial services firm Hargreaves Lansdown and health care company NMC Health, which were down 2.4% each.

In Frankfurt, tire maker Continental and adhesives manufacturer Covestro led the DAX into negative territory dropping 1.8% each, followed by construction materials supplier HeidelbergCement, and automaker Daimler, which were off 1.5% each. Deutsche Bank and chemicals BASF fell 1.1% and 0.8% respectively, while automaker Volkswagen and insurance firm Allianz each closed 0.7% lower.

And in Paris, oilfield services company TechnipFMC and tire maker Michelin led the CAC lower falling 2.2% and 1.8% respectively, followed by automaker Peugeot and construction materials supplier Saint-Gobain, which were down 1.4% each. IT and consulting firm Cap Gemini and supermarket operator Carrefour dropped 1.3% and 1% respectively, while luxury goods company Kering and hotel operator Accor each closed 0.9% lower.

The FTSE lost 0.94%, the DAX edged 0.07% lower, and the CAC-40 fell 0.13%.

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