In addition to the upcoming elections in France, investors are likely to turn their attention to the publication of new US economic data. New US price data in particular could provide the decisive impetus on Friday. Investors should also keep an eye on speeches by Fed representatives and check for monetary policy signals.
DAX Chart
Source: Tradingview
Fed representatives are cautious about possible interest rate cuts
Lisa Cook (Governor of the US Federal Reserve) said on Tuesday that the Fed would lower the key interest rate if economic development meets its expectations. However, she would not specify a date.
"Our current policies are well positioned to respond to any changes in the economic outlook if needed," Cook said in a speech to a meeting of the Economic Club of New York.
Her colleague Mary Daly from the Fed in San Francisco had already said on Monday that the Fed should "exercise caution" in its efforts to bring inflation under control.
Ifo index and Gfk consumer climate worse than expected
New data on the GfK consumer climate index had already put a damper on the market on Wednesday morning. The institute is expecting a reading of minus 21.8 points for July, following a revised minus 21 points in June. A value of minus 18.9 points was expected, which would have corresponded to the fifth increase in a row.
The widely observed ifo Business Climate Index for June had already been weaker than expected (89.7 points) at 88.6 points on Tuesday, following 89.3 points in the previous month.
Numerous US economic data take center stage on Thursday
On Thursday, market players are likely to focus primarily on potentially important US data.
New data on durable goods orders, gross domestic product and weekly initial jobless claims will be published at 14:30.
Orders for durable goods may have stagnated in May compared to the previous month (0 percent), following an increase of 0.7 percent in April.
At 1.3%, US economic output in the first quarter of the year is also likely to have developed less strongly than before (3.4%) compared to the previous quarter.
US price data likely to decide the weal and woe on Friday
On Friday, investors will first look at the development of German retail sales (08:00) and new data on the labor market (09:55).
However, the weekly highlight is likely to be the price index for personal consumption expenditure in the USA (PCE), which is the preferred measure of inflation.
The week will be rounded off by new consumer sentiment data (Michigan) at 16:00 and a speech by Michelle Bowman (Governor) at 18:00.
