The tug-of-war between confidence and caution on the stock markets has not yet been decided. The DAX is balancing on a knife's edge between hopes for interest rate cuts, geopolitical risks, and high expectations for the AI industry.
On the German stock market, restraint is likely to dominate initially in the middle of the week. After the recent back and forth on the stock exchanges, investors' eyes are turning to the European Central Bank's central bank forum in Sintra. Investors are likely to scrutinize every wording for possible monetary policy clues, particularly with regard to future interest rate policy and how central banks are dealing with ongoing inflation risks.
In addition to monetary policy question marks, tensions in the Middle East and the ambitious valuations of many AI stocks remain potential headwinds, suggesting caution rather than new record highs.
DAX
Despite framework agreement between Iran and US: Middle East risks likely to continue to accompany investors
The Iran war is likely to continue to concern investors, despite a framework agreement signed between Tehran and Washington. Both parties had spoken out for an immediate and permanent end to the conflict about two weeks ago. However, the war flared up again last week with reciprocal attacks. In this context, it remains important to observe developments very closely.
ADP employment data could offer a preview of NFPs - Speeches from Kevin Warsh and Christine Lagarde ahead
A preview of the US jobs data could be provided today at 2:15 PM by the ADP employment data.
A speech by Fed Chairman Kevin Warsh and ECB President Christine Lagarde will be in focus at 3:00 PM, as they speak at the ECB Forum in Sintra, Portugal. Market participants expect important insights into future monetary policy in this context.
At 4:00 PM, it is important to keep an eye on the ISM Manufacturing PMI.
US labor market data: Economists expect a significant slowdown in job gains compared to the previous month
Thursday will likely be dominated by US labor market data (Non-Farm Payrolls) (2:30 PM), which are being moved up a day due to the holiday and will therefore not be released on the first Friday of the new month as usual.
Economists expect that a total of 110,000 new jobs were created outside of agriculture in June, a significant decrease from May (172,000 jobs). The unemployment rate is estimated to remain unchanged from the previous month at 4.3 percent.
Monetary policy in the US is likely to remain one of the central topics of discussion in the market. According to the CME Group's „Fed Watch Tool,“ 33.7 percent of market participants currently expect a quarter-percentage-point interest rate hike at the upcoming meeting on July 29, 2026.
