Investors' attention is now likely to turn to Donald Trump's upcoming speech at the World Economic Forum in Davos. The geopolitical tensions surrounding Greenland remain the focal point. The Greenland conflict has long since ceased to be a marginal geopolitical issue. Questions about raw materials, trade routes and geopolitical influence act as a central risk factor.
As long as there are no clear political signals regarding Greenland, the DAX is likely to remain vulnerable. The market is currently reacting less to its own fundamental data than to geopolitical headlines.
Important economic data is also on the agenda for the rest of the week, particularly in the USA.
DAX
Trump expresses confidence in solution before departure to Davos
The Greenland conflict is likely to continue to preoccupy investors. US President Donald Trump is expected to visit the Swiss Alpine resort of Davos this afternoon. Due to the solidarity of European NATO countries with Greenland and Denmark, Trump recently announced punitive tariffs against Germany and other European countries from February 1 if they do not give in and sell Greenland to the United States. Before leaving for Davos, the US President said that a solution would be found that both NATO and the USA would be very happy with. He again pointed out that the USA needed Greenland for security reasons.
Focus on US economic data on Thursday - purchasing managers on both sides of the Atlantic could make a difference on Friday
From the perspective of the economic data calendar, investors will focus on the US GDP growth rate and the weekly initial claims for US unemployment benefits on Thursday (14:30).
The core rate for personal consumption expenditures in the US should be watched at 16:00.
On Friday, the purchasing managers in Germany (HCOB) for the services, manufacturing and „total“ sectors in particular will be on the agenda (09:30) and for the eurozone at 10:00.
The counterparts for the USA (S&P Global) will follow at 15:45.
Fed meeting could cast a shadow ahead - interest rate pause possible
The question marks over the future shape of US monetary policy could therefore once again become one of the more prominent topics on the market, especially as the US Federal Reserve (Fed) is set to make its first decision this year on the future key interest rate level next Wednesday (January 28). However, according to the CME Group's „Fed Watch Tool“, only 5% of market participants currently expect a rate cut of 25 basis points and 95% expect a pause in interest rates. The interest rate spread itself is currently between 3.50 and 3.75 percent.
The dispute between Trump and Powell could also be a topic of discussion again after the World Economic Forum in Davos. The US President has repeatedly put pressure on the Fed Chairman recently. Powell's term of office as Fed Chairman officially expires at the end of May.
