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IMF: Europe, Other Energy-importing Countries Hit Hard by Middle East War

Countries particularly hit the hardest by the war in the Middle East are those that are heavily dependent on energy imports and have limited policy space, according to the International Monetary Fund."More than three months into the war in the Middle East, the global economy appears to be holding up," IMF Managing Director Kristalina Georgieva said in a blog post published Monday. "But an overall resilient global picture masks significant disparities. Even among advanced economies, some countries and communities have been harder hit. And in Africa, the negative impacts are more conspicuous. Meanwhile, with the prolonged closure of the Strait of Hormuz and infrastructure in the Middle East damaged by the fighting, uncertainty and risks remain high."Georgieva noted that Europe, which heavily relies on imported oil and gas, is facing higher inflation due to increased energy prices. France, Italy and Germany are among the euro area countries that have logged an increase in inflation since the war began in February.

Persian Gulf Outlook Sends European Bourses to Fresh Zeniths

European bourses tracked into fresh record-high territory midday Monday, after Tehran and Washington announced that the Strait of Hormuz would re-open this week, as part of larger, ongoing peace negotiations.The pan-continental Stoxx Europe 600 Index, a broad equity gauge, was up 0.7% mid-session, into fresh record-high levels.Bank and tech shares gained on continental trading floors, while oil stocks sank.Front-month North Sea Brent crude-oil futures were down 5% at $83.01 a barrel, in midday trades.Investors also eyed Wall Street futures flashing green, and sharply higher closes overnight on Asian exchanges, led by a 5% upsurge on Tokyo's Nikkei 225 index.In economic news, seasonally adjusted industrial production in the Eurozone and in the European Union rose 0.1% in April from March, reported Eurostat. On year, industrial output increased by 0.3% in the euro area and by 0.9% in the broader EU.The Stoxx Europe 600 Technology Index was up 1.2%, and the Stoxx 600 Banks Index gained 1.5%.The Stoxx Europe 600 Oil and Gas Index eased 3%, while the Stoxx 600 Europe Food and Beverage Index declined 0.2%.The REITE, a European REIT index, rose 0.2%.On the national market indexes, Germany's DAX was up 1.2%, and the FTSE 100 in London gained 0.1%. The CAC 40 in Paris was up 1.2%, and Spain's IBEX 35 lifted 1.5%.Yields on benchmark 10-year German bonds were lower, near 2.95%.The Euro Stoxx 50 volatility index was down 7.6% at 17.29, indicating below-average volatility for European stock markets in the next 30 days, a positive signal. A reading above 20 indicates choppier markets ahead, while below 20 suggests calmer exchanges.

Ifo: Business Climate in German Residential Construction Sector Weakens in May

The business sentiment among Germany's residential construction companies deteriorated in May, following a decline in the previous month, amid a persistent state of uncertainty, the ifo Institute survey said Monday.The ifo business climate index for the sector declined to -29.3 points from -28.2 points in the previous month as companies saw a "somewhat worse" present situation despite a marginal improvement in expectations. Businesses, however, remained pessimistic over their future.Surveyed companies that reported "too few" orders fell to 42.2% from 43.8%, whereas cancellations of construction projects rose to 11.7% from 10.8%.

Eurozone Records Trade Deficit in April

The euro area recorded a trade deficit of 1 billion euros in April, against the revised surplus of 4.9 billion euros in March, according to Eurostat data published Monday.The consensus estimate for the month was a surplus of 7.8 billion euros.Exports of goods to the rest of the world increased 5% year over year to 255.4 billion euros, while imports climbed 9.3% to 256.4 billion euros.

Eurozone Monthly Industrial Production Up 0.1% in April

The euro area's industrial production rose 0.1% month over month in April, after a revised 0.4% increase in March, Eurostat data showed Monday.The consensus estimate for the month was a 0.3% gain.On a yearly basis, industrial production recorded a 0.3% climb, compared with the revised 2.8% drop earlier.

Italian Trade Surplus Declines in April

Italy recorded a trade surplus of 4.29 billion euros in April, down from the revised surplus of 4.81 billion euros in March, according to data from statistics agency Istat published Monday.Analysts expected a trade surplus of 5.19 billion euros for the month.Seasonally adjusted exports fell 2.2% month over month, while imports declined 0.6%.

German Annual Wholesale Prices Up 5.9% in May

Germany's wholesale selling prices climbed 5.9% year over year in May, following a 6.3% jump a month ago, the country's Federal Statistical Office said Monday.On a monthly basis, wholesale prices were 0.6% lower, against the consensus estimate of a 0.8% uptick.

Sinking Oil Prices, Rising Peace Hopes Lift European Bourses Midday

European bourses tracked solidly higher midday Friday as traders digested media reports of a possible peace deal between Washington and Tehran, and weighed sinking oil prices.Bank, property and tech stocks led gains on continental trading floors, while oil shares lagged.Front-month North Sea Brent crude-oil futures traded on the cusp of $87 a barrel midday, after cresting near $94 a barrel on Thursday.Investors also eyed Wall Street futures flashing green, and solidly higher closes overnight on Asian exchanges.In other news, Elon Musk's SpaceX is slated to start trading on the Nasdaq in New York at the opening bell, with IPO shares priced at $135 each. The offering, the largest IPO in history, plans to raise $75 billion, resulting in a $1.77 trillion market cap for the enterprise, which operates spacecraft and the Starlink satellite system.The pan-continental Stoxx Europe 600 Index was up 1.6% mid-session.The Stoxx Europe 600 Technology Index was up 1.4%, and the Stoxx 600 Banks Index gained 3.9%.The Stoxx Europe 600 Oil and Gas Index eased 2.6%, while the Stoxx 600 Europe Food and Beverage Index inclined 0.8%.The REITE, a European REIT index, rose 1.9%.On the national market indexes, Germany's DAX was up 1.7%, and the FTSE 100 in London gained 1.3%. The CAC 40 in Paris was up 1.9%, and Spain's IBEX 35 lifted 2.3%.Yields on benchmark 10-year German bonds were lower, near 2.99%.The Euro Stoxx 50 volatility index was down 9.9% at 19.13, indicating below-average volatility for European stock markets in the next 30 days, a positive signal. A reading above 20 indicates choppier markets ahead, while below 20 suggests calmer exchanges.

Spanish Annual Inflation Rate Confirmed at 3.2% in May

Spain's annual inflation was unchanged at 3.2% in May, final data from the National Statistics Institute confirmed Friday.On a monthly basis, consumer prices in Spain were up 0.1%, in line with the initial reading and down from the previous 0.4% jump.The Spanish annual harmonized inflation rate was 3.6%, matching the flash figure and higher than the previous 3.5%. Month over month, harmonized consumer prices gained 0.1%, in line with the initial data, and against the 0.7% increase earlier.Meanwhile, the country's annual core inflation rate grew to 3% from 2.8%, above the 2.9% flash figure.

French Annual Inflation Rate Confirmed at 2.4% in May

As expected, France's annual inflation rate rose to 2.4% in May from 2.2% in April, final data from statistics agency Insee showed Friday.On a monthly basis, consumer prices were 0.1% higher, consistent with the flash estimate, and easing from the prior 1% increase.The annual harmonized inflation rate climbed to 2.8% from 2.5%, matching the preliminary reading. Month over month, harmonized consumer prices edged up 0.1%, as expected, compared with the previous 1.2% increase.

German Annual Inflation Eases to 2.6% in May, Final Data Shows

Confirming the flash estimate, Germany's annual inflation rate fell to 2.6% in May from 2.9% in April, final data from the country's Federal Statistical Office showed Friday.On a monthly basis, consumer prices were down 0.2%, matching the preliminary reading.The annual harmonized inflation rate for May stood at 2.7%, confirming the initial estimate and down from the prior 2.9%. Meanwhile, the harmonized consumer prices declined 0.1% month over month, consistent with the flash data.

World Bank Trims 2026 GDP Growth Forecast for Euro Area

The World Bank trimmed its 2026 economic growth forecast for the euro area amid higher energy prices, with the region facing headwinds due to its reliance on natural gas and oil imports.In its latest Global Economic Prospects released Thursday, the international organization said the euro area's gross domestic product is expected to grow 0.8% in 2026, lower than its 0.9% projection in January.GDP growth is expected to pick up to 1.3% in 2027, compared with its previous 1.2% forecast. For 2028, GDP is projected to expand by 1.3%.Meanwhile, the World Bank expects interest rate increases in the euro area in the near term.

ECB Lifts Inflation Projections for 2026, 2027 Amid Higher Energy Prices

The European Central Bank on Thursday disclosed upwardly revised baseline inflation projections for 2026 and 2027 as the war in the Middle East fueled higher energy prices.The baseline of the new Eurosystem staff projections expects average headline inflation of 3%, 2.3% and 2% in 2026, 2027 and 2028, respectively. Meanwhile, the average core inflation estimates were 2.5% in 2026 and 2027, and 2.2% in 2028.In March 2026, headline inflation was expected to average 2.6%, 2% and 2.1% over the three-year period, while core inflation was estimated to average 2.3%, 2.2% and 2.1%.For economic growth, ECB staff forecast an average of 0.8% in 2026, 1.2% in 2027 and 1.5% in 2028, mirroring a "more pronounced" war impact on commodity markets, real incomes and confidence. Previously, the estimates were 0.9%, 1.3% and 1.4%, respectively.

German Current Account Surplus Falls in April

Germany's current account surplus totaled 13.8 billion euros in April, down by 10.7 billion euros from the previous month, the Deutsche Bundesbank said Thursday.The German central bank attributed the movement to lower surpluses in merchandise trade and so-called invisible current account transactions.

ECB Hikes Interest Rates Amid Inflation Pressures from Middle East War

The European Central Bank's Governing Council decided to raise its three key interest rates by 25 basis points at its June meeting on Thursday, citing inflationary pressures stemming from the war in the Middle East.As widely expected, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will increase to 2.25%, 2.40% and 2.65%, respectively, effective June 17.The central bank said the outlook remains uncertain, with the war's full implications for medium-term growth and inflation contingent on the length and intensity of the energy price shock, among other factors. "With today's decision, the Governing Council remains well positioned to navigate the uncertainty caused by the war."

European Central Bank Hikes Interest Rates by 25 Basis Points

European Bourses Gain Despite Central Bank, Persian Gulf Outlooks

European bourses tracked moderately higher midday Thursday even as traders awaited clarity on the latest round of Persian Gulf hostilities, and anticipated a rate hike from the European Central Bank (ECB).The ECB is expected to raise its key interest rate to 2.25% from 2% Thursday, the first rate increase since 2023, as the continent faces inflationary pressures from rising energy bills.Bank, oil and tech stocks led gains on continental trading floors in midday action, while property shares lagged.Investors also eyed Wall Street futures flashing green, and uneven closes overnight on Asian exchanges.In economic news, the European Union must be prepared to impose new sanctions on Iran if Tehran continues its aggressive actions and contributes to the ongoing crisis in the Middle East, Reuters reported, citing Italian Prime Minister Giorgia Meloni.The pan-continental Stoxx Europe 600 Index was up 0.8% mid-session.The Stoxx Europe 600 Technology Index was up 0.7%, and the Stoxx 600 Banks Index gained 1.4%.The Stoxx Europe 600 Oil and Gas Index rose 1.2%, while the Stoxx 600 Europe Food and Beverage Index inclined 0.4%.The REITE, a European REIT index, fell 0.3%.On the national market indexes, Germany's DAX was up 0.4%, and the FTSE 100 in London gained 0.9%. The CAC 40 in Paris was up 0.9%, and Spain's IBEX 35 lifted 1.4%.Yields on benchmark 10-year German bonds were lower, near 3.04%.Front-month North Sea Brent crude-oil futures were up 0.9% at $92.31 a barrel.The Euro Stoxx 50 volatility index was down 4.2% at 20.61, but still indicating above-average volatility for European stock markets in the next 30 days, a negative signal. A reading above 20 indicates choppier markets ahead, while below 20 suggests calmer exchanges.