Investors are eagerly awaiting the publication of new US inflation data. First, however, they are likely to be watching the Fed minutes from the latest Fed meeting this Wednesday evening. Market participants should also keep an eye on the start of the US reporting season. The recent dominance of geopolitical risks due to the ongoing conflict in the Middle East could also trigger renewed downside risks at any time.
DAX Chart
Source: Tradingview
Joy over strong US jobs report gives way to a sober view
The joy over the latest US jobs report has also given way to a more sober view in this country. The bottom line is that 254,000 new jobs were created in the United States outside of agriculture, which is significantly more than expected (140,000), as announced by the US Department of Labor last Friday. The positive jobs data was also confirmed by the unemployment rate, which fell by 0.1 percentage points to 4.1%. Investors obviously interpreted the data as strength in the US economy, even if the chances of interest rate cuts may have dimmed on the other side.
Investors hope for important clues from Fed notes
Things should get exciting today at 20:00 with the publication of the so-called "FOMC Minutes". Investors are hoping for new clues about the state of US monetary policy. Two weeks ago, the Fed lowered interest rates for the first time since March 2020, heralding the long-awaited turnaround in interest rates.
Last week, Fed Chairman Jerome Powell held out the prospect of interest rate cuts of 50 basis points for the current year. According to the CME Group's Fed Watch tool, there is an 86.7 percent probability that the interest rate will be adjusted by half a percentage point at the upcoming meeting on November 7.
Economists expect US inflation to fall - but core rate could remain at 3.20 percent
The US inflation data on Thursday (14:30) may well decide the weal and woe of the stock market week.
According to current estimates, an inflation rate of 2.30 percent is expected for September (compared to the same month last year), after 2.50 percent in August.
However, the Fed's core inflation rate could remain at 3.20 percent.
On Friday morning (08:00), the focus will initially be on the final inflation rates for the Federal Republic of Germany. A rate of 1.6% is expected, after 1.9% in the previous month (compared to the same month last year).
US producer prices give important inflation signals - Major US banks kick off reporting season
Further important inflation signals could usually be provided by US producer prices (14:30). Experts expect a slowdown of 0.1 percentage points to 0.2 percent compared to the previous month.
In addition to consumer confidence (Reuters/Michigan), investors should keep an eye on the quarterly figures from JPMorgan, Wells Fargo, the Bank of New York Mellon and BlackRock at 16:00. The start of the US reporting season is also likely to be eagerly awaited in Frankfurt am Main.
