The last few trading days have been characterized in particular by the Federal Reserve's decision on key interest rates. The recently heralded turnaround in interest rates could be one of the reasons for investors to gain a stronger foothold in the stock market in the coming weeks.
Against this backdrop, the DAX climbed above the 19,000-point mark for the first time in its history on Thursday.
DAX Chart
ZEW data at lowest level since May 2020 - US retail trade stronger than expected
In a trading week with comparatively little momentum from the perspective of the economic data calendar, investors were initially confronted with new ZEW data on Tuesday. The barometer for the current situation fell by 7.2 points to minus 84.5 points in September, which corresponds to the worst level since May 2020.
However, there were rays of hope from the USA. US retail sales data came in better than expected overall (-0.20 percent vs. 1.00 percent).
US Federal Reserve lowers interest rates by 50 basis points - further rate cuts conceivable
For the first time since March 2020, the Fed has turned the notorious interest rate screws downwards again. Late on Wednesday evening, the US monetary authority announced a so-called XL interest rate cut, reducing the interest rate level by 50 basis points to a range of 4.75-5.00%.
It was completely open in advance that such a reduction in interest rates would occur. Overall, the members of the Open Market Committee had voted almost unanimously in favor of an interest rate cut of 0.50 percentage points. Only Board member Michelle Bowman voted in favor of a quarter of a percentage point.
The Fed recently lowered its key interest rate in response to the coronavirus outbreak and the associated economic slump. In 2022, the US monetary watchdog attempted to reign in inflation with aggressive interest rate hikes, which last month stood at 2.5% (year-on-year).
The Fed is expected to adjust the interest rate downwards by half a percentage point in the current year. A range of 2.75 to 3.00 percent is expected for 2026, it said.
US initial jobless claims provide signs of easing on the job market
The initial claims for US unemployment benefits, which are usually published on a weekly basis, signaled signs of easing on the important US labour market on Thursday. A total of 219,000 people applied for state support, significantly fewer than expected (230,000). The critical threshold is considered to be 270,000 applications, which would signal a negative trend reversal on the labor market.
German producer prices continue to fall - Christine Lagarde in view
According to the latest figures, the decline in German producer prices continued in August due to cheaper energy, which fell by an average of 0.8% year-on-year, the 14th decline in a row. However, an even sharper fall (1.0%) was expected. In a monthly comparison (July to August), prices had recently risen by 0.2%.
At the end of the week, in addition to EU consumer confidence (16:00), last but not least, speeches by ECB President Christine Lagarde (17:00) and FOMC member Patrick T. Harker in the spotlight.
