Relief at the success in the second round of the election for Federal Chancellor remains limited. After the defeat in the first attempt, however, uncertainty remains palpable. The Fed meeting expected this evening is also likely to cast its shadow.
DAX
Source: TradingView
Friedrich Merz is elected Federal Chancellor at the second attempt
Friedrich Merz has become Federal Chancellor at the second attempt. On Tuesday afternoon, the 69-year-old achieved the necessary majority of more than 316 votes. In the morning, Merz had fallen short of the required majority, which is unprecedented in the history of the Federal Republic of Germany. Shortly after the results were announced, the leading German index fell by several hundred points.
Investors in this country are likely to be hoping in particular for a financial package worth billions, which is intended to benefit infrastructure, among other things.
"Fed Watch Tool" does not signal a rate cut - Powell rhetoric in view
From the perspective of the economic calendar, this week is relatively unspectacular, even though the expected US Federal Reserve meeting is one of the first major highlights on the agenda for the month of May.
Retail sales for the eurozone are also on the agenda this morning (11:00 am).
However, investors will be focusing on the Federal Reserve's interest rate decision this Wednesday evening (20:00). From 20:30, Fed Chairman Jerome Powell's rhetoric is likely to be put on the gold scale. It will be interesting to see whether Powell comments on the current tariff conflict.
The so-called "Fed Watch Tool" of the CME Group signals only a 2.4% chance of a rate cut of 25 basis points a few hours before the key interest rate decision. Conversely, the probability of a rate pause is 97.6%. The interest rate band itself currently stands at 4.25 to 4.50 percent.
German industrial data in focus on Thursday - investors must continue to digest the reporting season
On Thursday, the focus in Germany will be on new data on industrial production (08:00). Attention should also be paid to the initial claims for US unemployment benefits (14:30). Just last Friday, the official US labor market report (non-farm payrolls) was extremely robust, contrary to expectations. A smoothly running jobs engine could give the monetary authorities less powerful arguments to lower the key interest rate.
Investors also have to process the figures for the past financial quarter from BMW, Vonovia and Fresenius today.
