New interest rate concerns and geopolitical uncertainties have pushed the DAX well below the psychologically important 18,000-point mark again.
Concerns about a new escalation of the Middle East conflict between Iran and Israel are likely to remain with investors. Although fears of an escalation have eased somewhat in the meantime, the conflict could continue to hover over investors' heads like the sword of Damocles.
DAX 40 Chart
Source: Tradingview
US data stronger than expected - China GDP also convincing
New US retail trade data at the start of the week had already demonstrated the resilience of the US economy, which was significantly better than expected.
Meanwhile, China's gross domestic product (GDP) also grew more strongly than expected, which should also benefit the western world. China is also seen as a growth engine for the rest of the world. Economic development in the world's second-largest economy is therefore likely to attract constant attention.
The ZEW index surprised on Tuesday. The index is now at its highest level for over two years. In particular, the prospect of falling global capital market interest rates is boosting sentiment, according to the report.
EU inflation falls to 2.9 percent as expected - interest rate fantasies remain alive in Germany
As expected, the latest figures show that EU inflation rose by 2.9% in March, in line with economists' preliminary estimates. In February, the core rate of inflation climbed by 3.1% year-on-year.
Falling inflation rates provide the European Central Bank (ECB) with arguments for possibly adjusting the key interest rate downwards in June. The interest rate currently stands at 4.50 percent.
The Fed's so-called "Beige Book", which provides an overview of the current economic situation, is also likely to be of interest this Wednesday evening (20:00).
June interest rate cut in the USA stands on feet of clay
A speech by Fed representative Mester (11:30 p.m.) could also attract interest late Wednesday evening.
On Tuesday, Jerome Powell caused irritation during an event at the Wilson Center in Washington. "The latest data have clearly not given us greater confidence, but instead suggest that it will probably take longer than expected to achieve that confidence," Powell said. Last month, inflation had proved more stubborn than expected.
On Thursday, the weekly US unemployment figures (14:30) will round off a generally manageable economic data calendar. Last month, the official US labor market report (non-farm payrolls) was already extremely strong, putting a damper on interest rate cut fantasies.
Reporting season starts in the DAX - impulses conceivable at any time
The reporting season is also likely to provide fresh impetus. On Monday, US investment bank Goldman Sachs presented its figures, which were convincing thanks to successful business in investment banking. While Morgan Stanley's figures also came as a positive surprise, falling interest income at Bank of America had a negative impact on earnings.
The DAX company Sartorius will kick things off in Germany on Thursday.
