The DAX is still on the drip of the oil price. The German benchmark index is trapped in a triad of high energy prices, restrictive monetary policy, and geopolitical risks. September is thus living up to its reputation as a difficult stock market month.
Ahead of the eagerly awaited US Federal Reserve meeting, investors are likely to keep their powder dry anyway. On Wednesday evening, the Fed is scheduled to decide on the future level of key interest rates.
DAX
ZEW Index in focus this morning
Today, Tuesday, the ZEW Index of economic sentiment is also in focus (11:00 a.m.). Economists expect a total reading of 37 points, compared to 34.2 points in August. This index is published by the Mannheim-based Centre for European Economic Research (ZEW) and serves, not least, as an important leading indicator for the German economy. Up to 350 experts are surveyed for this purpose.
US central bank to decide on key interest rate on Wednesday evening – rate hike likely
On Wednesday, the focus will be particularly on the US central bank meeting of the Federal Reserve (Fed). The key interest rate decision is usually expected for 8:00 PM, and the subsequent FOMC press conference with Kevin Warsh for 8:30 PM. One day before the decision, 94.3 percent of market participants expect a total interest rate hike of a quarter percentage point, and only 5.7 percent expect a rate pause.
Oil price: Situation in the Middle East remains tense
The situation in the Middle East remains tense. A major oil route in Saudi Arabia, the so-called East-West Pipeline along with its alternative route, was shut down last week following attacks. A date for the resumption of operations by the state-owned company Saudi Aramco is still pending. At the same time, the situation in the Strait of Hormuz, which is still considered to be de facto blocked, remains opaque. A solution between Iran and the US still does not seem to be in sight.
Oil price (West Texas Intermediate)
