In addition to new inflation data, DAX investors are likely to be eagerly awaiting the official US labor market report next Friday. However, the fact that the US economy is performing better than expected is dampening the prospect of interest rate cuts in the US and possibly also in the eurozone in the near future. Against this backdrop, the principle of caution dominates at the beginning of April.
DAX 40 Chart on a weekly basis
Source: Tradingview
Industrial and labor market data "too strong" - interest rate cut fantasies on the decline
New data on US industry and the labor market caught investors on the wrong foot on the first trading day after the long Easter weekend. At 50.3 points, the ISM manufacturing index for March was not only well above expectations (48.4 points), but also above the expansion threshold of 50 points.
The so-called "JOLTs" (jobs available in the United States) had also exceeded estimates, signaling strength in the labor market.
German inflation declining - investors keep an eye on EU inflation and Jerome Powell
The provisional inflation figures for the Federal Republic of Germany also caused a stir on Tuesday. Consumer prices climbed by 2.2 percent in March compared to the same month last year, which was as high as expected (previously: 2.5 percent).
The equivalent figure for the eurozone today, Wednesday (11:00), remains of great importance in this context. Economists are expecting an inflation rate of 3.0% after 3.1% in February compared to the same month last year.
The ADP data could also be of interest, which will provide an initial indication of the US labor market data on Friday (14:15). In this case, job growth excluding the agricultural sector is expected to reach 148,000 after 140,000 in the previous month.
The ISM index for the services sector (16:00) could also provide impetus.
A speech by Fed Chairman Jerome Powell (6:10 p.m.) is to be tapped for monetary policy clues.
Purchasing managers and US labor market data round off the trading week - clouding of NFPs expected
On Thursday, purchasing managers (HCOB) will be on the agenda first (09:55), which could signal a brighter economic picture for Germany.
Without question, Friday is dominated by the publication of the US jobs report (non-farm payrolls) at 14:30.
Before that (11:00 a.m.), however, the development of EU retail sales could attract interest. Economists expect a decline of 1.3 percent after a drop of 1 percent in the previous month.
According to expectations, the labor market report for the US could have fallen by 75,000 jobs to 200,000 units in March. The unemployment rate is expected to remain unchanged at 3.9%.
The development of average hourly wages is also likely to be significant. In this case, an increase of 0.3% is expected compared to the previous month after 0.1% in February. An increase in wage growth is again likely to fuel inflation concerns.
