In the second half of the week, investors were increasingly concerned about new US debt. A controversial US tax package recently cleared an important hurdle in the US House of Representatives. In addition to the already smouldering trade disputes, the ifo business climate index and fresh gross domestic product figures brightened the mood in Germany. Last Tuesday, the Frankfurt stock exchange barometer also climbed above the psychologically important 24,000-point mark for the first time in history.
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"Big Beautiful Bill" clears important hurdle in the House of Representatives - concerns about debt on the rise
With their narrow majority, the Republicans have cleared an important hurdle in the House of Representatives for US President Donald Trump's tax cut plans (Big Beautiful Bill). However, these plans still have to be waved through the Senate. Several Republican senators still want to make changes to the bill, according to US broadcaster CNN. In total, tax breaks amounting to USD 4.5 trillion are to be extended, which were already implemented during Trump's first term in office in 2017.
China data mixed - Fed representative Bostic worries about rising inflation
At the beginning of the week, it was Chinese economic data from the Middle Kingdom that attracted attention. While retail sales rose by 5.10% compared to the same month last year, which was less than expected (5.50%), industrial production exceeded expectations at 6.10% (5.50%).
In addition, various Fed representatives made repeated statements this week. For example, Raphael Bostic of the Atlanta Fed said on Monday that the central bank may only be able to cut interest rates by a quarter of a percentage point this year due to concerns about rising inflation, which is being fueled by higher import taxes.
Ifo index rises for the fifth time in a row - highest level since June 2024
The widely observed ifo Business Climate Index was published on Thursday. The mood in the boardrooms of German companies improved slightly in May. The index rose by 0.6 points to 87.5 points, the fifth time in a row and the highest level since last June.
German GDP increases twice as much as expected - hopes for an upswing
On Friday morning, new figures on the development of gross domestic product (GDP) in Germany caused a stir. This is because the German economy grew twice as much at the beginning of the year as previously thought. From January to March, GDP increased by 0.4 percent compared to the previous quarter, according to the Federal Statistical Office.
Even if this week's economic data calendar is comparatively unspectacular, monetary policy stimuli await investors in the afternoon with Fed representatives Jeffrey Schmid (Kansas) and Alberto Musalem (St. Louis/ 2:35 pm) as well as Governor Lisa Cook.
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Source: TradingView
