The upward trend on the US stock markets has continued this week. In Germany, the DAX 40 is still struggling to sustainably conquer the 17,000-point mark. Investors have evidently come to terms with the recent disappointment over the dampened interest rate cut fantasies.
Over the week, the Frankfurt stock market barometer rose by around 0.34% to 16,976 points. The Dow Jones Industrial Average Index rose by 0.19 percent to over 38,726 points. The S&P 500 broke through the 5,000-point barrier for the first time in its history on Thursday.
DAX 40 on weekly basis
REPRESENTATIVES OF THE FED AND ECB URGE PATIENCE WITH REGARD TO INTEREST RATE CUTS
Following last week's Fed meeting and the US labor market report, the past few days have been somewhat quieter, as expected. Nevertheless, some central bank representatives provided some impetus. For example, the head of the Richmond Federal Reserve District said: "I'm pleased that inflation is falling and I hope it continues to fall. I think we have some time to be patient". Accordingly, he wanted to see inflation figures that signaled a sustained and broad-based decline towards the Fed's two percent target. His colleagues had also signaled a cautious approach.
In the view of leading central bankers, the European Union needs more clarity about the path of inflation. "We really need to let the data come in for a while," said ECB Executive Board member and chief economist Philip Lane at an event in Washington on Thursday.
US ECONOMIC DATA POSITIVE - GERMAN INDUSTRIAL DATA ON THE DECLINE FOR THE FOURTH TIME IN A ROW
The ISM data for the non-manufacturing sector in the US had already been better than expected at the start of the week.
In Germany, poor industrial production data in the middle of the week caused a negative mood. German industry was once again weak at the end of the year. The industrial sector has been on a downward trend for four months.
CHINA DEFLATION DRIVES INVESTORS - PRICES FALL THE MOST IN 15 YEARS
In China, prices fell as sharply as they last did during the financial crisis 15 years ago. In January, price pressure stood at minus 0.9%, meaning that deflationary pressure in the second-largest economy remains high. One of the reasons cited was the Chinese Spring Festival, which took place on January 22 in 2023. This year, the event will take place next Saturday.
GERMAN INFLATION AT LOWEST LEVEL SINCE JUNE 2021 - US INFLATION DATA NEXT WEEK AS HIGHLIGHT
Inflation in the Federal Republic of Germany continued to ease at the start of the new year. At 2.9%, year-on-year price pressure was significantly lower than the previous month's figure of 3.7%. This puts inflation at its lowest level since June 2021 (2.4%).
Experts expect the inflation rate to fall further over the course of the year, although the pace could slow down.
This Friday, a speech by Fed member Logan at 19:30 could once again provide impetus. New inflation data for the US, which will be published on Tuesday, is also likely to cast its shadow at the beginning of next week at the latest.
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