Germany's DAX index extended its losing streak to a third day on Thursday, closing 0.93% lower amid a regional retreat in Europe on Halloween. This decline coincides with an unexpected surge in eurozone inflation for October. Eurostat's flash estimate showed that consumer prices in the euro area are projected to grow 2% year over year in October, up from 1.7% in September and exceeding the consensus estimate of 1.9%.
The European Union's statistical office reported that services were the largest contributor to this inflation increase. Meanwhile, Eurostat's data indicated that the unemployment rate in the eurozone remained unchanged at 6.3% in September. The number of unemployed individuals in the bloc was estimated to be around 10.884 million for that month. ING highlighted that this latest data could temper dovish sentiments that emerged following the European Central Bank's monetary policy meeting in October.
A representative from ING stated, "The European Central Bank frequently used the motto that 'the last mile is the hardest' when it comes to inflation fighting before summer, but hasn't done so recently. The slow decline in core inflation gives us the feeling that there is still some truth to that. The labor market remains tight at the moment, which adds to wage pressures.
We expect wage growth to decrease over the course of 2025 as labor market tightness continues to ease, but we aren't seeing this effect just yet." Focusing on Germany, the Federal Statistical Office reported that import prices in the country fell by 1.3% year over year in September, contrasting with a 0.2% increase in August.
Additionally, September data revealed that the annual growth rate for export prices eased to 0.4%, down from 0.8% in the previous month. In corporate developments, Siemens ($SIE) saw its shares close 0.60% lower after announcing a 300 million-euro deal to sell its airport logistics business to Toyota Industries' Vanderlande.
The German technology group stated that this divestment allows for further future-oriented development of the Siemens Logistics business. Analysts from RBC Capital Markets noted that the sale supports Siemens' long-standing strategy of simplification..