On the German stock market, hope for diplomacy and a possible de-escalation in the Middle East is currently prevailing again. The stock markets are currently fluctuating between geopolitical nervousness regarding the Iran war, interest rate concerns, hope for diplomatic détente, and growing AI enthusiasm.
Although the US had recently attacked targets in southern Iran amid negotiations, the issue seems to be increasingly fading into the background for investors. Markets are currently reacting on a ‚out of sight, out of mind‘ principle. Investors are instead betting on further negotiations and a stabilization of the geopolitical situation.
The second half of the week is likely to be exciting with the release of numerous US economic data.
DAX
Despite ceasefire: US military attacks Iranian missile positions
Following the new US military attacks on Iranian missile sites on Tuesday, the geopolitical conflict between Washington and Tehran is likely to remain one of the central topics of discussion. According to US statements, these were „self-defense measures.“ Furthermore, Iranian boats were attacked in the Strait of Hormuz, which were intended to be used to lay naval mines, it was stated.
The Iranian side spoke of a ceasefire violation in this context. According to both sides, after weeks of talks, progress had recently been made on a letter of intent, consisting of a total of 14 points, which is intended to stop the war for the time being and give negotiators 60 days for a final agreement.
Numerous US economic data releases on Thursday
On Thursday afternoon, some economic data from the U.S. awaits investors. In addition to the core personal consumption expenditures rate, new orders for durable goods and the GDP growth rate (second estimate) will be released at 2:30 PM.
German inflation developments in focus on Friday
On Friday, the focus is likely to be on the preliminary inflation rates from the Federal Republic of Germany (2:00 PM).
After a recent 2.9 percent in April (compared to the same month last year), inflation could have been at the aforementioned level again in May. It will be exciting to see the extent to which the effects of the Iran conflict are visible.
ECB to decide on key interest rate on June 11
On June 11, the ECB Governing Council is scheduled to decide on the future key interest rate. It is possible that the European monetary authority could increase the key deposit rate from the current 2.00 percent to 2.25 percent, which would be the first change in key interest rates since the summer of 2025, among other things.
„Even if the war were to end today, significant damage has already been done to energy infrastructure and global supply chains,“ ECB board member Isabel Schnabel told Reuters in an interview published on Tuesday. „From today's perspective, I consider a rate hike in June to be necessary,“ Schnabel said.
In April, inflation in the Eurozone was 3.0 percent, significantly above the ECB's medium-term inflation target of 2.0 percent.
