The yield on 10-year US Treasuries surpassed 1.6% on Friday, up from 1.538% at Thursday's close. The increase is associated with the prospects for a strong economic recovery and renewed fears about inflation. US President Joe Biden on Thursday signed into law a $ 1.9 trillion new economic stimulus bill.
The European Central Bank (ECB), following its meeting on Thursday, promised to accelerate asset purchases in the second quarter amid rising borrowing costs in the region. Yields on government bonds in the euro area have been rising since February following US Treasury bonds after Joe Biden introduced a massive economic stimulus package.
The rise in bond yields raised fears that the recovery in the European economy could be hampered by higher borrowing costs for countries hit by the crisis caused by the pandemic.
Meanwhile, the UK economy fell 2.9% in January 2021 compared to December last year, according to the country's National Statistical Office (NSO). The decline in GDP was mainly driven by a downturn in the services sector, which was hit by the introduction of a nationwide lockdown effective January 4.
In addition, statistics showed a 41% drop in British exports to the EU in January on a monthly basis after the entry into force of new trade agreements between London and Brussels. Imports from the EU to the UK fell 29% in January.
The volume of industrial production in the euro area in January 2021 increased by 0.8% compared to December, according to Eurostat data. Compared to January 2020, industrial production increased by 0.1%. Analysts predicted an increase in the first indicator by 0.2%, a decrease in the second - by 2.4%.
The composite index of the largest enterprises in the region Stoxx Europe 600 dropped by 0.26% and amounted to 423.08 points.
The German DAX indicator dropped 0.46%, the Italian FTSE MIB - 0.03%. At the same time, the British FTSE 100 rose 0.36%, the French CAC 40 - 0.21%, the Spanish IBEX 35 - 0.6%.
Burberry Group Plc shares were up 7.1% on Friday. The British luxury goods maker predicts that its like-for-like sales in the fourth quarter of fiscal 2021, which ends March 27, will increase 28-32% from the same period a year earlier.
The market value of Hammerson Plc increased by 7.6%, although the British developer increased its pre-tax loss to £ 1.73 billion in 2020 from £ 779.3 million a year earlier.
UK-based Berkeley Group Holdings Plc fell 5.4% after the construction company said it expects pre-tax profit on the previous year's level of £ 504 million in the current fiscal year, which ends April 30.