In recent trading days, investors on both sides have also wavered between geopolitical and monetary policy risks. Yet the war involving Iran is apparently increasingly developing into a calculable unknown for the stock market. Investors in this country may have resigned themselves to the fact that tangible diplomatic progress falls rather into the category of wishful thinking. Rather than waiting for the big breakthrough, the markets continue to play by their own rules and are focusing in particular on the triad of energy prices, corporate profits, and monetary policy.
Mid-week, investors were confronted in particular with new US inflation data, which came in as expected. The monetary policy pressure may have lost a little momentum, at least temporarily.
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German consumer prices at 2.8 percent in July
On Wednesday, inflation data for the Federal Republic of Germany was also released. The preliminary estimates of 2.8 percent for July (compared to the same month last year) were confirmed by the Federal Statistical Office (Destatis). From June to July, consumer prices rose by 0.8 percent.
Price pressure could be fueled by the Iran war and low water levels in German rivers
Price pressure could potentially continue due to the ongoing war with Iran. The conflict between Washington and Iran remains unresolved. At the same time, the Strait of Hormuz also remains de facto blocked. Inflation could be fueled by the rise in energy prices. In June, consumers had to pay 8.3 percent more for refueling and heating than a year ago. At the same time, low water levels in German waterways could also contribute to the rise in energy prices.
US inflation at 3.4 percent in July – Monetary policy concerns ease somewhat
According to the latest data, the US inflation rate in July was 3.4 percent compared to the same month last year, matching economists' expectations, after 3.5 percent in June. Compared to the previous month, inflation rose by 0.1 percent, after having declined by 0.4 percent in June.
As data released on Thursday showed, US producer prices remained stagnant compared to the previous month, following -0.1 percent previously. Experts had expected an increase of 0.2 percent.
The FedWatch tool currently signals a 69.6 percent chance that there will be a pause in interest rates on September 16. 30.4 percent of market participants expect a 25 basis point increase in the interest rate level.
US economic data rounds off the trading week
To wrap up the week, in addition to retail sales, preliminary consumer sentiment data from the University of Michigan is on the agenda.
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