In addition to fresh US inflation data, it was the meeting of the European Central Bank in particular that has kept investors busy in recent days. Investors could therefore continue to find a breeding ground in a potential low interest rate environment. In Germany, the DAX once again reached a record high of well over 20,000 points. However, profit-taking in the tech sector recently put the brakes on US stock markets. Meanwhile, the US Federal Reserve meeting is now likely to cast its shadow.
DAX 40 Chart
Source: TradingView
China data gives investors cause for concern - fear of trade conflict due to Trump policy
In the first half of the week, investors were initially driven by new data from China. Chinese foreign trade continues to cause concern. In November, exports rose by 6.7% compared to the same month of the previous year, a much slower rate. In October, there had still been an increase of 12.7 percent. Investors also fear a trade conflict with the USA and Europe. US President-elect Donald Trump had announced his intention to impose additional tariffs of 10 percent on Chinese goods.
Core rate of US inflation remains at 3.3 percent - consumer prices including energy and food drivers rise
At 3.3% (year-on-year), the Fed's core inflation rate was as high as expected and thus unchanged from the previous month. However, consumer prices, including the drivers energy and food, rose again slightly in the same period (2.6% vs. 2.7%). All in all, the realization that the decline in inflation is thus stalling is likely to remain.
It remains to be seen whether the US Federal Reserve will keep up the pace of interest rate cuts in the future. However, investors are currently still betting on an interest rate cut of a quarter of a percentage point at the Fed's final meeting of 2024 next Wednesday.
ECB cuts interest rates as expected - no major surprises overall
As expected, the ECB has turned the interest rate screws downwards and thus adjusted the interest rate level downwards for the fourth time this year. Overall, the monetary watchdog reduced the bank deposit rate, which is important for the financial market, by a quarter of a percentage point to a level of 3.0 percent. The interest rate at which commercial banks can obtain new capital from the ECB also fell in this context, from 3.4 percent to 3.15 percent.
"There was some discussion about possibly considering 50 basis points, but everyone agreed overall that 25 basis points was indeed the right decision," Lagarde said.
Initial claims for US unemployment benefits pick up again - All eyes on the Fed in the year-end spurt
Attention was also paid on Thursday to the weekly initial claims for US unemployment benefits, which at 242,000 units were significantly higher than economists had expected.
Last Friday's official US jobs report had unexpectedly revealed more non-farm jobs. However, the US unemployment rate rose by 0.1 percentage points to 4.2%.
As was the case last Monday, there are no relevant stimuli on today's Friday agenda from the perspective of the economic calendar.
Market participants are now likely to turn their attention to the upcoming US Federal Reserve meeting on Wednesday, which should soon cast its shadow.
