In a generally manageable economic data calendar, the ZEW index and the European Central Bank (ECB) in particular provided a tailwind in Germany this week. In the US, the ongoing reporting season in particular caused a stir. The fact that the latest US economic data was better than expected is fueling hopes of a "soft landing". Once again, investors in both Germany and the USA welcomed record highs.
DAX Chart
Source: Tradingview
China support measures become more concrete - investors hope for further commitments
The hope of further support from the Chinese government for the domestic economy remains a topic of conversation in this country too. According to media reports on Tuesday, it was announced that new debt amounting to 774 billion euros is to be raised by issuing special government bonds over a period of three years. Chinese Finance Minister Lan Foan had announced his intention to "significantly increase" debt in order to help the domestic economy and the battered real estate market back on its feet.
ZEW data with a glimmer of hope for the German economy
The ZEW data provided a silver lining for the German economy on Tuesday. In view of the expectation that interest rates will continue to fall, the barometer for the next six months rose by 9.5 points to 13.1 points in October, following a total of three falls in a row. However, economists had previously expected an even greater increase (10.0 percent).
However, the current situation remains bleak (-86.9 points), which corresponds to the weakest value since May 2020.
"Based on a very poor assessment of the situation, economic expectations for Germany are rising," said ZEW Director Achim Wambach. "The expectation of stable inflation rates and the associated prospect of further interest rate cuts by the ECB have contributed to this."
Deposit rate for commercial banks falls to 3.25 percent - further interest rate cuts possible this year
Thursday, however, was dominated by the ECB central bank meeting. As expected, the European monetary watchdog lowered the deposit rate for commercial banks, which is decisive for the financial market, by a quarter of a percentage point to a level of 3.25%. However, there were no major surprises at the subsequent press conference with EBZ President Christine Lagarde. With a view to possible further interest rate hikes, it was said that the economic development would be awaited.
On 12.12.2024, the ECB will decide on its monetary policy for the last time this year according to plan.
US data fuels hopes of a "soft landing" - China data received calmly
The fact that the retail sector in the US grew by 0.4% in September compared to the previous month (0.3%), which was stronger than expected, is likely to have been welcomed by investors. At 241,000, weekly initial claims for US unemployment benefits were also significantly weaker than expected (260,000), compared with 260,000 in the previous week. Overall, both sets of economic data are likely to have eased the economic uncertainties.
New economic data from the Middle Kingdom also provided a talking point early on Friday morning. The data showed that the Chinese economy grew more slowly in the third quarter than at any time since the start of 2023. The sluggish real estate sector in particular remains a challenge, it was reported. Meanwhile, consumer and industrial production figures exceeded estimates.
Goldman Sachs and Morgan Stanley cause a sensation - Further corporate figures in view
The US investment bank Goldman Sachs increased its profit by 45 percent in the summer. The result for July to September was 2.99 billion dollars, compared to 2.06 billion dollars a year ago.
A flourishing mergers and acquisitions business ensured a jump in profits for Morgan Stanley.
This Friday, investors will also be looking at the figures for American Express and Procter & Gamble.
