DAX starts with losses – oil price and interest rate expectations weigh on markets

The DAX is likely to start with losses today. The broker IG estimates the German leading index to be around 0.3 percent in the red the morning before trading begins. This means that the fluctuation-prone development of the past few days continues. The DAX had already lost 0.7 percent to 25,411 points on Wednesday.

The price of oil is once again the focus of stock market events. The price of a barrel of Brent temporarily rose by 4.5 percent to almost $104 in the evening. The price had previously fallen to just under $98. The main reason for the renewed upward movement is the growing concerns about the supply of oil from the Middle East.

In the morning, oil became a little cheaper again, but the price for the North Sea Brent variety remained well above $100 per barrel.

No rapprochement between the USA and Iran

The geopolitical situation remains an important uncertainty factor. According to the British shipping authority UKMTO, another cargo ship in the Strait of Hormuz was hit by an unknown projectile and caught fire. The crew was therefore evacuated.

In addition, the hope for a diplomatic solution to the conflict between the USA and Iran has been dampened. At the UN general debate in New York, Iranian President Massoud Peseschkian rejected US pressure. There are still no signs of a rapid rapprochement between Washington and Tehran.

The high price of oil is problematic for the stock markets because it can drive inflation. At the same time, this increases the pressure on central banks to keep interest rates high for longer or even raise them further.

Wall Street under pressure

This was also felt on Wall Street. The Dow Jones lost 0.7 percent on Wednesday and the S&P 500 fell 0.8 percent. The Nasdaq 100 lost 1.1 percent after the index reached a record high the day before.

In addition to the oil price, strong US economic data caused unrest. Business activity in the US rose the most in more than five years in September. This increases speculation about further interest rate increases by the US Federal Reserve. At the same time, yields on the bond market rose significantly: the yield on five-year US government bonds exceeded the five percent mark for the first time since 2007.

Trump and Xi in view

Today the focus is also on Washington. US President Donald Trump and China's head of state and party leader Xi Jinping will meet there. The focus is, among other things, on trade relations.

Even before the planned talks, US Treasury Secretary Scott Bessent announced an initial agreement. An agreement expiring on November 10th, which provides for a tariff break in the trade dispute between the USA and China, has been extended by two months until January 10th.

"We met today to explore whether we can reach a larger agreement instead of a series of smaller steps," Bessent told Fox News after a meeting with Chinese Vice Prime Minister He Lifeng.

For investors, the talks are not just about tariffs. Dealing with artificial intelligence, technology exports and geopolitical issues are also likely to play a role.

New forecast for the German economy

The new joint diagnosis from the leading economic research institutes is due in Germany today. The autumn report is presented. The institutes are likely to significantly increase their growth expectations. According to previously known information, growth of around 1.3 percent is expected for this year, after 0.6 percent in the spring. 1.1 percent is expected for 2027.

The Organization for Economic Cooperation and Development (OECD) also expects an economic upswing in Germany. In its latest economic outlook, the industrialized countries organization forecast growth of 1.1 percent this year. This puts their current estimate 0.4 percentage points above the June forecast. The OECD also expects growth of 1.1 percent for the coming year.

The better forecasts are primarily due to the surprisingly robust development in the first half of the year as well as stronger exports and higher government spending. At the same time, high energy prices and structural problems in the German economy remain burdensome factors.