The broad-based major European indices closed lower in Friday trading, as investors were rattled by US President Donald Trump’s threat to impose new tariffs on Mexico, which he said wouldn’t be lifted until Mexico stops illegal immigration into the US.
In economic news, Germany’s Federal Statistical Office (Destatis) reported that the price-adjusted turnover of the retail enterprises in the country was 4.0%, and the not price-adjusted turnover was 4.8% higher in April compared with April 2018. The timing of Easter had a positive effect on the year-on-year development of turnover in April, while in 2018, the Easter business largely fell in March, while turnover decreased in April. In 2019, however, the Easter business largely fell in April.
In the period from January to April, German retail turnover was up a price-adjusted 2.2%, and a not price-adjusted 3.0% compared with the same period last year. In April, the calendar and seasonally adjusted turnover declined a price-adjusted 2.0%, and a not price-adjusted 1.5%, compared with March 2019.
In the UK, the Bank of England reported that consumer credit increased by GBP900 million ($1.13 billion) in April, which was in line with the monthly average increase since July 2018. The annual growth in consumer credit continued to decelerate to 5.9%. Net mortgage lending was GBP4.3 billion in April, slightly higher than the average of GBP3.8 billion seen over the previous six months. The Bank also said UK businesses raised GBP5.7 billion of net finance in April, which was spurred by borrowing from banks and bond markets.
And in Italy, according to preliminary estimates, in May 2019 the Italian consumer price index for the whole nation (NIC) increased by 0.1% on monthly basis and by 0.9% with respect to May 2018, down from +1.1% in the previous month.
The slowdown of the growth on annual basis of All items index was mainly due to prices of Services related to transport (from +2.8% to +1.6%), of Non-regulated energy products (from +3.7% to +2.4%) and, to a lesser extent, of Services related to recreation, including repair and personal care (from +1.6% to +1.1%).
The core inflation excluding energy and unprocessed food was +0.5% (down from +0.6% in April 2019) and inflation excluding energy was +0.6% (down from +0.7%).
The increase on monthly basis of All items index was especially due to prices Unprocessed food (+1.8%) and of Non-regulated energy products (+0.8%), only partially offset by the decrease of those of Services related to transport (-0.9%) and of Services related to communication (-0.5%).
The annual rate of change of prices of Goods was +0.9% (stable compared with the previous month) and that one of prices of Services was +0.9% (down from +1.3% in April 2019). As a consequence, the inflationary gap between Services and Goods was equal to zero percentage points (+0.4 in April).
Prices of Grocery and unprocessed food increased by 0.8% on monthly basis and by 0.5% on annual basis (up from +0.3% in the previous month).
In May 2019, according to preliminary estimates, the Italian harmonized index of consumer prices (HICP) increased by 0.1% on monthly basis and by 0.9% with respect to May 2018, down from +1.1% in the previous month.
Istat also reported that in April 2019 the industrial producer price index decreased by 1.1% compared with the previous month. Domestic producer price index decreased by 1.5%, while producer price index on non-domestic market increased by 0.1%.
The percentage change of the average of the last three months with respect to the previous three months decreased by 0.7% (-0.9% for the domestic market and +0.2% for the non-domestic market).
The industrial producer price index increased by 2.1% compared with April 2018 (+2.8% on domestic market and +0.6% on foreign market).
The construction producer prices index decreased by 0.2% in April 2019 with respect to the previous month and decreased by 0.8% on the same month of the previous year.
In equities, health care company NMC Health, and pharmaceutical firm Hikma Pharmaceuticals led the FTSE lower, falling 6.2% and 3.3% respectively, followed by industrial equipment rental company Ashtead Group, and tobacco and consumer goods company British American Tobacco, which lost 2.5% each. Mining company Antofagasta, and insurance firm Prudential were off 2.4%, while mining company Rio Tinto, luxury goods company Burberry Group, and turnaround firm Melrose Industries each closed 2.3% lower.
In Frankfurt, Wirecard led the DAX into negative territory, shedding 8.7%, followed by industrial group Thyssenkrupp, and adhesives manufacturer Covestro, which fell 3.7% and 2.9% respectively. Pharmaceutical firm Bayer, and automaker Volkswagen dropped 2.7% and 2.6%, while chemicals company Henkel, and automaker Daimler lost 2% and 1.8% respectively. Deutsche Bank was off 1.7%, while industrial gases company Linde and automaker BMW each closed 1.6% lower.
And in Paris, automaker Renault led the CAC lower, falling 4.6%, followed by oilfield services company TechnipFMC, and alcoholic beverage maker Pernod Ricard, which lost 2.5% each. Auto parts supllier Valeo, and steel and mining company ArcelorMittal were down 2.1% and 2% respectively, while luxury goods company Kering dropped 1.8%. Industrial groups Bouygues and Legrand fell 1.7% and 1.4% respectively, while pharmaceutical firm Sanofi, industrial gases company Air Liquide, and public relations firm Publicis Groupe each closed 1.3% lower.
The FTSE closed down 0.78%, the DAX lost was 1.47%, and the CAC-40 was 0.79% lower.