Following the publication of new US price data, investors on the German stock market are feeling more confident again. In this context, there is growing hope that the US Fed will succeed in the balancing act of getting inflation under control without stifling the US economy. Investors are now likely to turn their attention to US consumer prices and thus to the "true" inflation test as well as other economic data. The geopolitical tensions in the Middle East should also not be underestimated.
DAX Chart
Source: Tradingview
US producer price index weaker than expected - interest rate cut fantasies remain alive
In the current trading week, the focus of market participants is likely to be entirely on the development of US inflation data, which will need to be analyzed for monetary policy clues. The US producer price index rose by just 0.1% in July compared to the previous month, which was only half as much as expected, according to Tuesday's figures.
New data on the development of EU gross domestic product was published this morning. According to second estimates, GDP in the eurozone climbed by 0.6% in the second quarter compared to the same quarter of the previous year, which was as strong as expected.
Core rate of inflation could ease - interest rate cut possible in September
This afternoon's US inflation data (14:30) is likely to decide the weal and woe. Economists expect the core rate to come in at 3.2%, after 3.3% in June (year-on-year).
The CME Group's "Fed Watch Tool" currently estimates the probability at 50.5 percent that there will be a rate cut of 50 basis points at the September meeting (September 18).
Focus on US economic data and Fed representatives in the second half of the week - second-tier companies report
On Thursday, investors will focus on new US retail sales data and the weekly initial jobless claims (14:30).
Fed representatives Musalem (St. Louis/ 3:10 p.m.) and Harker (Philadelphia/ 7:10 p.m.) are also likely to provide monetary policy impetus.
Last but not least, new consumer sentiment data from Michigan will be on the agenda on Friday (16:00). Fed representative Goolsbee (Chicago) rounds off the trading week (19:25).
The focus today is on the figures from RWE, E.ON and Thyssenkrupp. In the USA, Walmart and Applied Materials will report on Thursday.
