In an overall brilliant trading week, tension on the stock markets on both sides of the Atlantic remains high. A cocktail of uncertainty consisting of recession worries and geopolitical risks had investors around the globe running for the hills at the start of the week. So-called "carry trades" are likely to have intensified the downward pressure. In an economic data calendar that continues to be manageable, corporate data could attract interest.
DAX Chart
Source: Tradingview
Recession worries, geopolitical risks and carry trades cause global stock market turbulence
Recession worries were sparked in particular by a strangely weak US jobs report last Friday. Outside of the agricultural sector, only 114,000 new jobs were created in the largest economy, significantly fewer than economists had expected (175,000). In this context, the US unemployment rate also climbed to 4.3 percent, compared to 4.1 percent in June. Despite the signs of weakness on the labor market and the associated fantasies of interest rate cuts, concerns about an economic slowdown obviously prevailed.
At the same time, the sale was accelerated by the unwinding of so-called "carry trades". Investors who obtained liquidity in Japan at a more favorable interest rate and invested it in higher-yielding currencies found themselves increasingly in trouble after the Bank of Japan's surprise interest rate hike.
Weekly initial jobless claims in view after US jobs report
Investors are likely to pay particular attention to the weekly initial jobless claims on Thursday (14:30). After last Monday's poor jobs data (non-farm payrolls), this data could provide important impetus.
The final inflation rates for the Federal Republic of Germany will be published on Friday at 08:00 for monetary policy indications. Economists expect a year-on-year increase of 2.3% for July, compared to 2.2% in June.
Further companies present their quarterly results in Germany
On Thursday, Deutsche Telekom, Munich RE, Siemens and Allianz will present their business figures for the past quarter. In view of the recent stock market turbulence, the reporting season could possibly take a back seat.
