Investors' attention is increasingly turning to the upcoming meeting between Donald Trump and Xi Jinping. Hope is growing in the markets that Beijing could act as a geopolitical bridge-builder between Washington and Tehran, thereby contributing to a de-escalation of the Iran conflict.
The DAX is likely to remain caught between economic concerns, energy prices, and geopolitical uncertainty. For the German market, the "AI story" is evidently not enough on its own to completely overshadow geopolitical risks at the moment.
It should be noted that despite the regional holiday „Ascension Day“ on Thursday, the stock exchanges in Frankfurt am Main will remain open.
DAX
Trump-Xi Meeting Casts a Shadow – Investors Hope for Signals of De-escalation
Following recent tense geopolitical developments, market participants are increasingly looking for signals that could support a stabilization of the situation in the Middle East. From the stock market's perspective, the meeting between Trump and Xi is likely to carry significant symbolic weight, which is increasingly casting its shadow. Investors are hoping that China will exert diplomatic influence and prevent further escalation in the Middle East conflict, which is still considered deadlocked. In addition to trade relations between China and the US, Taiwan could also become a topic. According to media reports, Trump is scheduled to meet Chinese leader Xi in Beijing on Thursday and Friday.
In any case, investors should continue to watch developments in the Middle East very closely. The Strait of Hormuz, in particular, is in the spotlight, which is considered to be effectively blocked by Iran or by a US naval blockade. The US is blocking ships heading for Iranian ports.
Producer prices and retail data in focus today and Thursday
Even from the perspective of the economic data calendar, there could be potential impulses from time to time this week.
In focus today are the US producer price data (2:30 PM), which could provide monetary policy signals from across the Atlantic.
However, investors are currently not holding out hope for timely interest rate cuts. According to the „Fed Watch Tool,“ 97.6 percent of market participants expect another interest rate pause on June 17, while only 2.4 percent anticipate an interest rate cut of a quarter percentage point.
Retail sales for the United States will also be in focus on Thursday (2:30 PM).
Earnings season as a potential catalyst
The ongoing reporting season remains important to watch. In addition to Siemens' (ISIN: DE0007236101) figures for the past business quarter, today the focus will be on the results from Deutsche Telekom (ISIN: DE0005557508), Allianz (ISIN: DE0008404005), E.ON (ISIN: DE000ENAG999), Merck (ISIN: DE0006599905), RWE (ISIN: DE0007037129), and Brenntag (ISIN: DE000A1DAHH0).
