In recent trading days, investors on both sides of the Atlantic have been confronted with important economic data in particular. The fact that inflation in Germany is lower than expected could keep interest rate cut fantasies alive.
The stock exchanges on Wall Street were closed for Thanksgiving, so there is likely to be a lack of impetus today (Friday), especially as trading will only be shortened in the USA.
DAX 40 Chart
Source: TradingView
Ifo index disappoints - "German economy lacks strength"
In Germany, the widely observed ifo business climate index was published on Monday, which failed to meet expectations (86 points) at 85.7 points, compared to 86.5 points in the previous month. The Munich-based institute surveys around 9,000 managers every month. After a total of four declines in a row, there was still an increase last month. "The German economy lacks strength," it said.
Fed notes signal disagreement in the ranks of the monetary watchdogs regarding interest rate cuts
On Tuesday, the eagerly awaited "Fed minutes" signaled disagreement in the ranks of the monetary watchdogs over interest rate cuts. However, there was consensus that this was the right time not to make any precise statements about the future development of US monetary policy in the coming weeks.
"Participants pointed out that monetary policy decisions are not on a predetermined course and depend on the development of the economy and the impact on the economic outlook (...) They emphasized that it is important for the Open Market Committee to make this clear when adjusting its monetary policy stance."
GfK consumer confidence disappointed - US data fuel interest rate cut fantasies
At midweek, GfK consumer confidence was also disappointing at -23.3 points in the morning. The forecast was -18.6 points, compared to -18.4 points in the previous month.
As expected, attention turned to numerous US data in the afternoon.
At 0.2%, orders for durable goods rose less than expected (0.5%) compared to the previous month, after -0.4% in October. This data is important as orders are generally associated with higher spending.
The annualized GDP growth rate (second estimate) for the third quarter (2.8%), after 3.0% in the previous quarter, did not come as a major surprise.
The so-called "PCE deflator" (core rate) for personal consumption expenditure also rose as expected by 0.3% compared to the previous month. The inflation data is also seen as an important benchmark for inflation trends.
German inflation rising less strongly than expected - eurozone inflation likely to move
According to an initial estimate, the inflation rate in Germany grew less strongly than expected (2.3%) at 2.2% (compared to the previous month), after 2.0% in October. This increase is due to so-called base effects. However, as inflation was weaker than expected, this could keep the ECB's interest rate cut fantasies alive.
Today, at the end of the week (11:00 a.m.), attention is likely to turn to European inflation data. Economists expect an inflation rate of 2.3% for the eurozone (previously: 2.0%).
