Investors are eagerly awaiting the next record high. Although the market has not forgotten the Middle East crisis, it has learned to deal with it better. However, the market participants' composure should not be mistaken for an all-clear. Even though the stock exchanges have meanwhile developed a certain resilience to the constant background noise of crises in the Middle East, the Strait of Hormuz in particular remains a neuralgic point for the financial markets. For investors, it is a tightrope walk between hopes for peace and geopolitical thin ice. The recent energy price spikes and the associated inflation concerns are acting as a drag on the path to record highs. Investors are likely to await the release of new US inflation data in the middle of the week with great anticipation.
DAX
Source: TradingView
Iran conflict as a factor of uncertainty – hopes for peace between Washington and Tehran are likely to persist
The Iran conflict is likely to remain one of the central topics of discussion in the market. According to US President Donald Trump, the Strait of Hormuz is free of mines and at the same time controlled by the US. However, Iran has not commented on these statements. Market participants are still waiting in vain for sustainable diplomacy between Washington and Tehran.
US inflation could lose some momentum – Investors hope for monetary easing speculation
In particular, Wednesday's focus will be on US inflation data, which investors are expected to examine for monetary policy clues. Economists expect an inflation rate of 3.4 percent for the month of July (compared to the same month last year), following 3.5 percent in June.
The core inflation rate, which excludes the drivers energy and food, is estimated to come in at 2.5 percent, which is 0.1 percentage points lower than in the previous month.
According to the CME Group's „Fed Watch Tool,“ 48.1 percent of market participants currently expect a pause in rate hikes at the September 16 meeting, and 51.9 percent expect a rate hike totaling a quarter of a percentage point. Should inflation turn out lower than expected, this could tend to ease concerns about interest rates. The target rate range itself currently stands at 3.50 to 3.75 percent.
More US economic data in focus: Between producer prices and retail sales
US producer prices (2:30 PM) could also be significant on Thursday regarding inflation trends.
Friday is rounded off by retail sales (2:30 PM) as well as preliminary consumer sentiment data from the University of Michigan (4:00 PM).
Earnings season is drawing to a close here as well – interim impulses conceivable
In the current earnings season, the focus today is on the figures for the past financial quarter from Gea Group (ISIN: DE0006602006), on Wednesday from E.ON (ISIN: DE000ENAG999), Hannover Rueck (ISIN: DE0008402215) and Brenntag (ISIN: DE000A1DAHH0), and on Thursday from RWE (ISIN: DE0007037129), Thyssenkrupp (ISIN: DE0007500001) and Hello Fresh (ISIN: DE000A161408).
