European markets mixed as traders await central bank verdicts
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 20 2025
0mins
Should l Buy GF?
Source: SeekingAlpha
Economic Indicators: The UK unemployment rate remains steady at 4.4% in January, while Germany's Producer Price Index (PPI) increased by 0.70% in February, falling short of expectations.
Market Developments: The pan-European Stoxx 600 index rose by 0.14% as investors await key monetary policy announcements, and Norway's sovereign wealth fund announced new investments in European property despite Hapag-Lloyd reporting a 19% decline in annual profits.
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Analyst Views on GF
Wall Street analysts forecast GF stock price to rise
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Current: 11.500
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Current: 11.500
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About GF
The New Germany Fund, Inc. (the Fund) is a diversified, closed-end management investment company. The Fund seeks long-term capital appreciation primarily through investment in middle-market German equities. The focus of the Fund's investments lies within Germany. Under normal market conditions at least 80% of the Fund’s net assets are invested in equity or equity-linked securities. The Fund invests in range of sectors, which include aerospace and defense; auto components; automobiles; banks; building products; chemicals; electrical equipment; independent power and renewable electricity producers; insurance; Internet and direct marketing retail; information technology (IT) services, life sciences tools and services; metals and mining; real estate management and development; software; textiles, apparel and luxury goods; trading companies and distributors; diversified financial services; commercial services and supplies, and others. The Fund's investment advisor is DWS International GmbH.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
European Economic Data and Market Dynamics
- Retail Sales Growth: Hungary's retail sales rose 3.5% year-on-year in January, indicating a rebound in consumer spending that could support the country's economic recovery and enhance market confidence.
- Stable Unemployment Rate: Switzerland's non-seasonally adjusted unemployment rate held steady at 3.2% in February, suggesting a stable labor market that contributes to sustainable economic growth and attracts investor interest.
- Slight Industrial Production Increase: France's industrial production rose 0.5% month-on-month in January, reflecting a moderate recovery in manufacturing that could positively impact overall economic growth and elevate market expectations.
- Inflation Rate Unchanged: Sweden's annual inflation rate remained at 0.5% in February, indicating price stability that may support the central bank's monetary policy and influence future interest rate decisions.
See More
Eurozone Composite PMI Index Rises to Three-Month High
- PMI Index Increase: The seasonally adjusted HCOB Eurozone Composite PMI Output Index rose to 51.9 in February from 51.3 in January, indicating a moderate recovery in economic activity, although overall growth remains subdued.
- Service Sector Improvement: The HCOB Eurozone Services PMI Business Activity Index increased from 51.6 in January to 51.9, suggesting a faster output growth in the service sector, despite the overall performance still being lackluster, reflected in the stagnation of hiring activities.
- New Business Growth: While the service sector's overall performance was modest, the slight increase in new business and optimism regarding future business activities provide a glimmer of hope for the economic outlook, indicating a growing confidence in the market.
- Stagnant Hiring Activity: Dr. Cyrus de la Rubia noted that companies have hardly hired any new staff over the past two months, suggesting that despite some positive signals, overall economic growth remains sluggish, and the cautious approach to hiring may impact future economic recovery.
See More
European Economic Data and Market Dynamics
- Western European Economic Indicators: Spain's Services PMI fell to 51.9 in February 2026 from 53.5 the previous month, indicating signs of economic slowdown that could impact future consumer and investment decisions.
- Inflation Trends: The annual inflation rate in the Czech Republic eased to 1.4% in February, reflecting reduced price pressures that may provide greater flexibility for monetary policy and support economic recovery.
- Energy Market Volatility: Oil prices advanced for the fourth consecutive day amid escalating tensions in the Middle East, while European natural gas futures rose over 3% to above €55/MWh, indicating growing market concerns over energy supply.
- Bond Yield Movements: The U.S. 10-year Treasury yield increased by 3 basis points to 4.08%, while Germany's 10-year yield decreased by 1 basis point to 2.76%, reflecting differing market expectations regarding future interest rate trajectories.
See More
Euro Area Annual Inflation Rises to 1.9%
- Inflation Increase: The Euro Area's annual inflation rate rose to 1.9% in February 2026, up from January's 16-month low of 1.7% and exceeding market expectations of 1.7%, indicating heightened price pressures that could influence ECB monetary policy decisions.
- Service Sector Price Pressure: Inflation in the services sector accelerated to 3.4% from 3.2% in January, suggesting increased consumer spending in services, which may lead to accelerated overall economic growth.
- Core Inflation Rebound: Core inflation, excluding energy, food, alcohol, and tobacco, increased to 2.4%, rebounding from January's more than four-year low of 2.2%, indicating rising underlying price pressures that could prompt the central bank to reconsider interest rate policies.
- Monthly CPI Change: The Consumer Price Index increased by 0.7% month-over-month in February 2026, rebounding from a 0.6% drop in January, indicating a recovery in the consumer market that may support economic growth.
See More
European Markets Decline Amid U.S.-Iran Tensions
- Budget Deficit Reduction: France's state budget deficit narrowed to EUR 9.7 billion at the end of January 2026, down from EUR 17.3 billion a year earlier, indicating an improvement in fiscal health that may provide more flexibility for future economic policies.
- Market Reaction: The pan-European Stoxx 600 index fell 1.6% on Tuesday as investors reacted to President Trump's vow to take whatever measures necessary against Iran, reflecting heightened concerns over geopolitical tensions that could lead to increased market volatility.
- Inflation Expectations Rise: European Central Bank Chief Economist Philip Lane warned that a prolonged war in the Middle East could lead to a substantial spike in eurozone inflation and hinder economic growth, impacting overall economic stability.
- Bond Yields Increase: The U.S. 10-year Treasury yield rose by 4 basis points to 4.088%, while Germany's and the UK's 10-year yields increased by 7 and 11 basis points respectively, indicating market concerns about future economic conditions and expectations of rising interest rates.
See More
European Equity Markets Decline Amid Rising Geopolitical Tensions
- Market Pullback: European equity markets experienced a decline at the start of March due to escalating tensions with Iran, leading to a cautious investor sentiment as the Stoxx 600 index fell by 1.73%, indicating a broad sell-off from last week's record highs.
- Surge in Energy Prices: While most sectors declined, the oil and gas sector saw a sharp increase in prices due to the conflict, exacerbating inflationary pressures across Europe and raising concerns about future economic growth.
- Germany's Retail Sales Data: Germany's retail sales shrank by 0.9% month-on-month in January, missing market expectations for a milder 0.2% drop, indicating weak consumer spending that could hinder future economic recovery.
- UK House Price Index Rise: The UK Nationwide House Price Index rose by 1% year-on-year in February 2026, exceeding expectations of a 0.7% increase, suggesting a resilient housing market that may provide some support to the economy.
See More
European Economic Data and Market Dynamics
- Retail Sales Growth: Hungary's retail sales rose 3.5% year-on-year in January, indicating a rebound in consumer spending that could support the country's economic recovery and enhance market confidence.
- Stable Unemployment Rate: Switzerland's non-seasonally adjusted unemployment rate held steady at 3.2% in February, suggesting a stable labor market that contributes to sustainable economic growth and attracts investor interest.
- Slight Industrial Production Increase: France's industrial production rose 0.5% month-on-month in January, reflecting a moderate recovery in manufacturing that could positively impact overall economic growth and elevate market expectations.
- Inflation Rate Unchanged: Sweden's annual inflation rate remained at 0.5% in February, indicating price stability that may support the central bank's monetary policy and influence future interest rate decisions.
See More
Eurozone Composite PMI Index Rises to Three-Month High
- PMI Index Increase: The seasonally adjusted HCOB Eurozone Composite PMI Output Index rose to 51.9 in February from 51.3 in January, indicating a moderate recovery in economic activity, although overall growth remains subdued.
- Service Sector Improvement: The HCOB Eurozone Services PMI Business Activity Index increased from 51.6 in January to 51.9, suggesting a faster output growth in the service sector, despite the overall performance still being lackluster, reflected in the stagnation of hiring activities.
- New Business Growth: While the service sector's overall performance was modest, the slight increase in new business and optimism regarding future business activities provide a glimmer of hope for the economic outlook, indicating a growing confidence in the market.
- Stagnant Hiring Activity: Dr. Cyrus de la Rubia noted that companies have hardly hired any new staff over the past two months, suggesting that despite some positive signals, overall economic growth remains sluggish, and the cautious approach to hiring may impact future economic recovery.
See More
European Economic Data and Market Dynamics
- Western European Economic Indicators: Spain's Services PMI fell to 51.9 in February 2026 from 53.5 the previous month, indicating signs of economic slowdown that could impact future consumer and investment decisions.
- Inflation Trends: The annual inflation rate in the Czech Republic eased to 1.4% in February, reflecting reduced price pressures that may provide greater flexibility for monetary policy and support economic recovery.
- Energy Market Volatility: Oil prices advanced for the fourth consecutive day amid escalating tensions in the Middle East, while European natural gas futures rose over 3% to above €55/MWh, indicating growing market concerns over energy supply.
- Bond Yield Movements: The U.S. 10-year Treasury yield increased by 3 basis points to 4.08%, while Germany's 10-year yield decreased by 1 basis point to 2.76%, reflecting differing market expectations regarding future interest rate trajectories.
See More
Euro Area Annual Inflation Rises to 1.9%
- Inflation Increase: The Euro Area's annual inflation rate rose to 1.9% in February 2026, up from January's 16-month low of 1.7% and exceeding market expectations of 1.7%, indicating heightened price pressures that could influence ECB monetary policy decisions.
- Service Sector Price Pressure: Inflation in the services sector accelerated to 3.4% from 3.2% in January, suggesting increased consumer spending in services, which may lead to accelerated overall economic growth.
- Core Inflation Rebound: Core inflation, excluding energy, food, alcohol, and tobacco, increased to 2.4%, rebounding from January's more than four-year low of 2.2%, indicating rising underlying price pressures that could prompt the central bank to reconsider interest rate policies.
- Monthly CPI Change: The Consumer Price Index increased by 0.7% month-over-month in February 2026, rebounding from a 0.6% drop in January, indicating a recovery in the consumer market that may support economic growth.
See More
European Markets Decline Amid U.S.-Iran Tensions
- Budget Deficit Reduction: France's state budget deficit narrowed to EUR 9.7 billion at the end of January 2026, down from EUR 17.3 billion a year earlier, indicating an improvement in fiscal health that may provide more flexibility for future economic policies.
- Market Reaction: The pan-European Stoxx 600 index fell 1.6% on Tuesday as investors reacted to President Trump's vow to take whatever measures necessary against Iran, reflecting heightened concerns over geopolitical tensions that could lead to increased market volatility.
- Inflation Expectations Rise: European Central Bank Chief Economist Philip Lane warned that a prolonged war in the Middle East could lead to a substantial spike in eurozone inflation and hinder economic growth, impacting overall economic stability.
- Bond Yields Increase: The U.S. 10-year Treasury yield rose by 4 basis points to 4.088%, while Germany's and the UK's 10-year yields increased by 7 and 11 basis points respectively, indicating market concerns about future economic conditions and expectations of rising interest rates.
See More
European Equity Markets Decline Amid Rising Geopolitical Tensions
- Market Pullback: European equity markets experienced a decline at the start of March due to escalating tensions with Iran, leading to a cautious investor sentiment as the Stoxx 600 index fell by 1.73%, indicating a broad sell-off from last week's record highs.
- Surge in Energy Prices: While most sectors declined, the oil and gas sector saw a sharp increase in prices due to the conflict, exacerbating inflationary pressures across Europe and raising concerns about future economic growth.
- Germany's Retail Sales Data: Germany's retail sales shrank by 0.9% month-on-month in January, missing market expectations for a milder 0.2% drop, indicating weak consumer spending that could hinder future economic recovery.
- UK House Price Index Rise: The UK Nationwide House Price Index rose by 1% year-on-year in February 2026, exceeding expectations of a 0.7% increase, suggesting a resilient housing market that may provide some support to the economy.
See More
