Following Donald Trump's inauguration the previous week and last Monday's deep-sea thunderstorm, investors are likely to turn their attention this week to the meetings of the major central banks, the Fed and the ECB. The ongoing reporting season could also continue to provide important impetus.
DAX Chart
Source: TradingView
Chinese startup DeepSeek causes irritation in the AI sector
Over the weekend, speculation about stronger AI competition from China provided plenty to talk about. According to this, AI systems from DeepSeek are more cost-efficient than the established competition, to the detriment of tech stocks. Despite the subsequent recovery, the fear of another wave of selling could continue to hover over investors' heads like the sword of Damocles.
Investors expect the Fed to pause interest rates - focus on Powell's rhetoric
Investors are likely to focus their attention on the Fed's first meeting of 2025 this Wednesday. The key interest rate decision is expected at 20:00. Fed Chairman Jerome Powell should appear before the public from 20:30. However, according to the CME Group's "Fed Watch Tool", there is still only a 0.5% chance of a rate cut. The rhetoric Powell uses and whether interest rate cut signals are sent are likely to be more important.
Focus on GDP figures - ECB decides on key interest rate level on Thursday
On Thursday, the first thing to keep an eye on will be new gross domestic product (GDP) data for Germany (10:00) and the eurozone (11:00).
The highlight of the day is the key interest rate decision by the European Central Bank (ECB) at 14:15. ECB President Christine Lagarde is expected to address the public at 14:45.
In addition to the annualized GDP for the United States, new data on core personal spending should also provide important impetus (14:30).
US price data could send important inflation signals - reporting season ahead with Meta, Microsoft and Tesla
Friday will initially be dominated by the publication of new labor market data in Germany (09:55).
However, the so-called PCE deflator for core personal spending is likely to be of greater importance (14:30). Investors expect this to provide important indications of inflation, which in turn could have an influence on US monetary policy.
In the reporting season, too, there are always potential sources of momentum waiting in the wings. On Thursday, investors should keep an eye on Deutsche Bank's preliminary figures for the past quarter.
In the US, attention will be focused on Meta, Microsoft and Tesla in the middle of the week and on Apple and Intel in particular on Thursday.
