Dusseldorf. Upcoming inflation data is luring investors out of their reserves in the middle of the week. The Dax starts this Wednesday with an increase of 0.6 percent at 25,560 points. There has been hardly any movement on the German stock market on the trading days so far this week.
Despite the recent purchases, the DAX lost numerous points in September. About four weeks ago, the leading index reached a record of 26,618.74 points. However, uncertainties caused by the Middle East conflict have had a lasting impact on the markets.
This can also be seen on the 200-day line. This forms the average of the period and represents the long-term trend. The line currently runs at 25,634 points. The leading index is currently hovering around the number of points. If it rises above this, there are signs of an overarching upward trend.
"Investors are currently finding it difficult to position themselves on one side or the other. The fear of choosing the wrong side is currently a high hurdle for most," says Thomas Altmann, portfolio manager at QC Markets.
Inflation data is likely to become relevant this Wednesday. The Federal Statistical Office is presenting new data on inflation in September. As a result of the Iran war and high fuel prices, the inflation rate in Germany could rise above the three percent mark - and thus to the highest level since the end of 2023. The authority had calculated a rate of 2.9 percent for August.
"Any negative surprise could generate new selling pressure. Conversely, a positive surprise could lead to a relief rally," said Altmann ahead of the data.
In the US, the US Department of Commerce publishes the Personal Consumption Expenditure (PCE) Price Index. This is the preferred inflation measure of the US Federal Reserve (Fed). The core rate excludes the more volatile prices for food and energy.
The index measures how much private households in the US actually spend on goods and services - and how these prices change. Unlike the Consumer Price Index (CPI), which is considered the official U.S. inflation rate, the PCE also takes into account expenses that are not directly paid by households, such as employer health insurance benefits.
Inflation – both in the USA and here – is driven by high crude oil prices. These are rising again after a brief relaxation in the Middle East conflict. The North Sea Brent variety for delivery in November rose by a good one percent to just under $104 per barrel, while US light oil WTI for delivery in November increased by half a percent to around $90 per barrel.
US President Donald Trump contradicts a report by the news portal Axios. Accordingly, he wanted to ease sanctions and release frozen funds in return for concrete steps by Iran in its nuclear program. The day before, prices had fallen because crude oil supplies from the Middle East had recovered.
The inflation data is driving interest rate speculation again. If inflation rises, the probability that central banks will increase key interest rates also increases. They want to slow down loan growth and dampen demand because consumption and investments fall with more expensive loans.
However, if inflation falls, central banks have leeway to cut interest rates. Investors therefore follow every new inflation figure closely: it shows how likely the central bank's next interest rate decision will be.
At the beginning of September, the Fed had already raised the key interest rate by a quarter of a percentage point and promised further interest rate hikes. The European Central Bank (ECB) also increased interest rates in September. A large proportion of market participants are pricing in a further interest rate hike by the Fed at its next interest rate meeting, while fewer than half of the ECB believe there will be one.
These interest rate expectations have long been reflected in the bond markets. Yields on the US bond market have reached levels not seen in almost 25 years: 30-year US government bonds were trading at up to 5.62 percent on Tuesday, their highest level since 2002, while ten-year bonds are approaching this value and are currently at the 2007 level.
Concerns about government finances, a high supply of new issues and rising inflation due to high energy costs are driving returns. Since the ten-year return serves as a reference value for mortgage, car and sometimes credit card interest, this also makes financing more expensive for US consumers.
