European stocks experienced slight declines on Wednesday as investors maintained a cautious approach. The focus was on developments surrounding the US debt ceiling, while Eurozone inflation was confirmed at 7%. In corporate news, UBS announced an estimated financial impact of approximately $17 billion resulting from the acquisition of Credit Suisse. Additionally, an investor consortium, including Blackstone and Reuters, sold around £2.7 billion worth of London Stock Exchange Group stock. The pan-European STOXX 600 index decreased by 0.1% to 464 points. However, Germany's DAX 40 index managed to gain 0.3%, reaching 15,940 points, thanks to a 2% surge in Siemens' shares. The German group raised its full-year sales and profit guidance after reporting better-than-expected Q2 sales. Conversely, Commerzbank shares declined by 7% despite strong Q1 results, as the bank indicated that income from higher interest rates may have peaked.

The Euro Area's consumer price inflation was confirmed at 7.0 percent in April 2023, slightly higher than the previous month's 13-month low of 6.9 percent. The rate remained significantly above the European Central Bank's target of 2.0 percent, indicating that policymakers will likely continue their efforts to curb inflationary pressures. Energy prices rebounded by 2.4 percent compared to a decline of 0.9 percent in March, while the cost of services increased at a faster pace of 5.2 percent. However, inflation slowed for food, alcohol, and tobacco, as well as non-energy industrial goods. On a monthly basis, consumer prices rose by 0.6 percent, marking the third consecutive month of increase. The core index, which excludes volatile items such as food and energy, eased slightly to 5.6 percent but remained near the all-time high of 5.7 percent recorded in March.

Italy posted the largest trade surplus in 20 months of EUR 7.5 billion in March 2023, swinging from the EUR 0.8 billion deficit in the corresponding period of the previous year and coming well above the market estimates of EUR 2.5 billion surplus due to consistently falling energy prices. Exports grew by 4.7% yoy to EUR 59.4 billion, with significant increases noted for machinery and appliances n.e.c. (+20.0%), motor vehicles (+27.4%) and food, beverages and tobacco (+10.8%). In the meantime, imports fell by 9.8% to EUR 51.8 billion, following the collapse of purchases of natural gas from Russia. Regarding trade with other EU members, Italy posted a deficit of EUR 0.9 billion.

Passenger car registrations in the European Union increased 17.2% yoy to 803,188 units in April 2023, marking the ninth consecutive month of rise. All the bloc's largest markets grew solidly, led by Italy (29.2%) and France (21.9%). Meanwhile, battery electric car registrations in the EU jumped by 51.9% to 94,561 units in April, accounting for 11.8% of the market. Considering the first four months of the year, EU car registrations climbed by 17.8% from the same period in 2022 to 3.5 million units. Despite the year-on-year improvement, sales were still down by 22.8% compared to the same period in 2019, highlighting the EU car market’s ongoing struggle.

The unemployment rate in France was steady at 7.1% in the first quarter of 2023, the same as a downwardly revised reading of 7.1% in Q4 2022, and the lowest since Q2 2020 during the first covid lockdown. The number of unemployed people declined by 7,000 to 2.2 million. At the same time, the unemployment rate for people aged 15-24 decreased by 0.2 points to 16.6%. On the other hand, the unemployment rate was stable for those aged 25-49 at 6.4%, while unemployment rate for aged 50 or more bounced back slightly at 5.2%. Among genders, the jobless rate was lower for women (6.8%) than for men (7.4%). Meanwhile, the activity rate edged up by 0.2 points to 73.9% from 73.7%.

Average new home prices in China's 70 major cities dropped by 0.2 percent year-on-year in April 2023, much slower than a 0.8 percent fall in the previous month. This was the 12th straight month of decrease in new home prices but the softest pace since May 2022, amid efforts from Beijing since last year to speed up policy measures to spur a recovery of the ailing property sector. Among the Chinese biggest cities, prices fell at softer pace in Tianjin (-0.9% vs -1.6% in March), Shenzhen (-1.1% vs -1.5%), and Guangzhou (-0.1% vs -0.2%). Meantime, prices continued to grow in Beijing (4.5% vs 4.6%), Chongqing (1.2% vs flat reading), and Shanghai (4.6% vs 4.1%). On a monthly basis, new home prices rose by 0.4 percent, the fourth straight month of growth, after a 0.5 percent gain in March which was the strongest rise in 21 months, as the economy fully re-emerged from pandemic disruptions.