The past trading week was characterized in particular by the influence of new US inflation data. The fact that the price pressure in the United States is less than expected is likely to have strengthened interest rate cut fantasies and lured investors out of their reserves again after the recent price slump around a week and a half ago.
DAX Chart
Source: Tradingview
ZEW temporarily puts investors off - US price data weaker than expected
In Germany, it was the ZEW index that caused market participants to hold their breath on Tuesday. The ZEW research institute's sentiment barometer fell by 22.6 points compared to the previous month to 19.2 units. "The economic outlook for Germany is collapsing," said the ZEW. In addition to the smouldering conflict in the Middle East, the unclear formulation of monetary policy and poor US economic data were also cited.
However, new data on the US producer price index provided some relief, with a rise of 0.1%, which was only half as strong as expected. This data is also seen as an important indication of future inflation trends.
Raphael Bostic from the Chicago Fed was cautious on Tuesday with regard to potential interest rate cuts. According to him, he wants to see "a few more pieces of data" before he supports a turn of the interest rate screws.
EU GDP provides no major surprises - core rate of US inflation falls
New EU GDP figures in the eurozone did not come as a major surprise. According to second estimates, economists expect GDP growth of 0.6% for the second quarter (compared to the same quarter of the previous year).
The publication of new US inflation data was undoubtedly the highlight of the week. At 3.2%, the core inflation rate, which the Fed considers to be decisive, was as high as expected, albeit below the previous month's figure of 3.3%. Consumer prices, including the drivers energy and food, rose by 2.9% after an expected 3.0% (previously: 3.0%).
US data better than expected - recession worries recede again
The fact that the US retail sector performed better than expected last month (0.3%) is likely to have somewhat dampened the recession worries that have dominated recently. Compared to the previous month, sales rose by one percent, after falling by 0.2 percent in the previous month.
At 227,000, weekly initial jobless claims were also weaker than expected (235,000).
Alberto Musalem of the Fed's St. Louis branch said on Thursday that the time for monetary easing was "possibly" approaching.
Today, Friday, the focus is likely to return to US economic data on the Michigan Consumer Sentiment Index (16:00). A speech by Goolsbee (Chicago/ 19:25) could also provide important monetary policy impetus at the end of the week.
