The past few trading days have been dominated by developments in the trade dispute, the ECB central bank meeting and the ongoing reporting season. On balance, investors are likely to continue to hope for a last-minute agreement in the tariff conflict between the US and the EU.
In addition, the Fed meeting scheduled for next Wednesday could soon cast its shadow.
DAX
Source: TradingView
Customs deal between USA and Japan euphorizes investors - hopes for "last-minute deal" between USA and EU
The deal announced in the tariff dispute between the USA and Japan caused a stir in the first half of the week. According to Trump, "reciprocal" tariffs of 15 percent have been agreed. In addition, Japan would invest 550 billion dollars in the USA on his "instructions", according to the US President.
Hopes are high that the latest deal will act as a possible blueprint in the trade dispute between the USA and the EU.
ECB deposit rate remains at 2.0 percent - uncertainty due to trade conflicts, among other things
As expected, the European Central Bank (ECB) did not turn the interest rate screws on Thursday afternoon and thus paused interest rates after seven cuts in a row. The deposit rate thus remains at 2.0 percent. According to the central bank, the environment "remains exceptionally uncertain, primarily due to trade conflicts".
The decision did not come as a major surprise. In addition to the uncertainty surrounding the customs dispute, inflation in the eurozone had also fallen significantly recently. In June, the rate was 2.0%, which is as high as the ECB's average target.
"We are well positioned to wait and deal with the turbulent waters that await us," said ECB President Christine Lagarde.
In the US, the Federal Reserve (Fed) is scheduled to decide on the future interest rate level next Wednesday evening (20:00).
Purchasing managers are mixed on both sides of the Atlantic
The economic data calendar only provided important impetus on Thursday with numerous purchasing managers. The aforementioned index (HCOB) was worse than expected for the manufacturing industry and overall, while the services sector just managed to exceed expectations.
In the eurozone, however, both the overall index and the services sector performed better than expected. The manufacturing sector fell short of expectations.
On the US side, however, the services sector fared better, while the manufacturing sector failed to meet the estimates made in advance.
Ifo index remains below expectations - focus on US economic data in the afternoon
This Friday morning, the widely observed ifo business climate index also caused a stir, improving significantly to 88.6 points after 88.4 points in the previous month. However, a value of 89.0 points was expected in advance. "The upturn in the German economy remains anemic," said ifo head Clemens Fuest.
In addition, incoming orders for durable goods in the USA could provide important impetus this afternoon (14:30).
Volkswagen struggles with US tariffs - forecast revised downwards
In the reporting season, the car manufacturer Volkswagen (ISIN: DE0007664039) caused long faces in Germany. Operating profit for the second quarter slumped by around 30 percent to 3.8 billion euros. The forecast was also cut due to the tariffs imposed by US President Donald Trump. According to information from Friday, VW is now only expecting sales at the previous year's level. Previously, an increase of up to five percent was considered possible.
Volkswagen
Source: TradingView
Dow Jones Industrial Average Index
Source: TradingView
