For investors on both sides of the Atlantic, a week of unclear insights could be coming to an end. While various Fed representatives displayed hawkish rhetoric, economic data in both Germany and the US was mixed. Market players are likely to focus in particular on new US price data today.
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Ifo index puts a damper on the economy - Fed representatives with "hawkish" rhetoric
New data on the most important economic barometer for the Federal Republic of Germany put a damper on the economy at the start of the week. At 88.6 points, the ifo Business Climate Index for June was significantly weaker than expected (89.7 points), following 89.3 points in the previous month.
Investors were also concerned about the restrictive rhetoric from Fed representatives at the start of the week.
Lisa Cook (Fed Governor) and Mary Daly (San Francisco Fed) were "hawkish" with regard to the future shape of US monetary policy.
In Cook's opinion, the US Federal Reserve will lower the key interest rate if economic development meets its expectations. However, she did not want to give an exact date.
"Our current policies are well positioned to respond to any changes in the economic outlook if needed," Cook said in a speech to a meeting of the Economic Club of New York.
Her colleague Mary Daly from the Fed in San Francisco, however, said that the Fed should "exercise caution" in its efforts to bring inflation under control.
Consumer confidence from the Conference Board, on the other hand, exceeded expectations of 100 points on Tuesday with 100.4 points, after the barometer had stood at 101.3 points in May.
GfK consumer climate also disappointing - US data with no clear trend
Similar to the ifo index, new data on the GfK consumer climate in Frankfurt am Main in the middle of the week caused disappointment, which was significantly weaker than expected at minus 21.8 points (-18.9 points).
On Thursday, new orders for durable goods surprisingly increased (0.1 percent), after a decline of 0.1 percent compared to the previous month had been expected.
As these data are associated with larger investments, they are of greater significance in this context in terms of economic output activity.
According to final data, the US economy grew by 1.4% in the first quarter of the year compared to the previous quarter, which was as strong as expected after GDP had grown by 3.4% in the previous quarter.
At 233,000, weekly initial jobless claims were slightly below expectations (236,000) and well below the previous figure (239,000). Investors would have welcomed further signs of weakness on the US labor market.
German labor market data in focus - all eyes on US price data
This Friday, the focus will initially be on retail trade data for the Federal Republic of Germany (08:00) and the June jobs report (09:55).
The weekly highlight on the agenda for the afternoon (14:30) is core spending on personal consumption, which is seen as an important guideline for future inflation trends.
In addition to consumer confidence (Michigan) at 16:00, speeches by Fed representatives Barkin (Richmond/12:00) and Bowman (Governor/18:00) could also attract interest.
Uncertainty over French election likely to persist
The parliamentary elections in France, which start next Sunday, are also likely to cast their shadows further ahead. A total of 577 members of the 17th National Assembly will be elected in two rounds of voting, which will take place on June 30 and July 7, 2024. French President Emmanuel Macron had ordered the dissolution of parliament after the European elections and announced early elections.
