Investors on both sides of the Atlantic can look back on a relatively quiet trading week. In Germany, the upcoming elections in France in particular are likely to cause some movement. In the USA, investors continue to rack their brains over the future shape of monetary policy, which is also likely to have an impact here. However, the recent AI rally in the US paused on Thursday.
DAX 40 Chart
Source: Tradingview
China data mixed - Fed central bankers disagree on interest rate cuts
Mixed economic data from China at the start of the week failed to provide any sustained movement. While industrial production did not quite meet expectations with a rise of 5.6% (6%), retail sales data rose by 3.7% compared to the same month last year, which was higher than expected (3%).
In addition, investors were repeatedly confronted with monetary policy stimuli. On Monday, for example, Patrick Harker, President of the Philadelphia Fed, said that the US Federal Reserve could cut its key interest rate once this year. "If everything turns out as predicted, I think a rate cut by the end of the year would be appropriate."
Thomas Barkin of the Richmond Fed, on the other hand, said that he would have to analyze economic data for several more months before considering a rate cut.
EU inflation at 2.9 percent - ZEW index and US retail sales disappoint
As expected, the final core rate of EU inflation came in at 2.9% on Tuesday, following 2.7% in the previous month (year-on-year comparison).
The ZEW index in Germany was a disappointment with only 47.5 points (expectation: 50 points).
US retail sales were also weaker than expected (0.2%), rising by 0.1% after falling by 0.1% in the previous month.
While the stock exchange doors remained closed in the middle of the week due to the "Juneteenth" holiday on Wednesday, trading in Frankfurt am Main also tended to be manageable.
However, initial applications for US unemployment benefits were slightly higher than expected on Thursday. Last week, 238,000 people applied for such benefits, the US Department of Labor announced on Thursday. Experts polled by Reuters had expected 235,000, after a revised 243,000 the week before. Consequently, the four-week average is now 232,750 applications.
The rule of thumb is 270,000 initial applications, which would signal a negative trend on the labor market.
With its restrictive monetary policy, the US Federal Reserve (Fed) is attempting to contain inflation and, not least, to cool the labor market.
Investors also cashed in on NVIDIA shares on Thursday (-3.54%). The chip manufacturer currently dominates the global market for AI processors with an 80 percent share.
Witches' Sabbath likely to cause some unconventional movements - purchasing managers disappoint in Germany
Today, Friday, the so-called "witches' Sabbath" must also be survived in this country. Options and futures on shares and indices on the futures exchanges expire today, which may lead to unconventional price movements.
However, today's HCOB purchasing managers for the Federal Republic of Germany and the eurozone painted a gloomy picture, with the figures for the manufacturing and services sectors coming in significantly weaker than expected.
In the afternoon, it is important to keep an eye on the S&P Global counterpart (15:45).
