The German market index (Dax) started its trading day on Tuesday in negative territory. By 9:30 AM, the leading index had calculated around 24,045 points, which represented a 0.2 percent drop from the previous day’s closing level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that the Dax continues to lack momentum in either direction. He noted that investors are receiving a distraction this week from the main focus on Iran, due to a combination of central bank meetings and the peak of the first-quarter earnings season. Already, the Bank of Japan held its Governing Council meeting, keeping the key interest rate unchanged but stressing that it will closely monitor inflationary dynamics. This prompted an initial market reaction of profit-taking, causing the Nikkei to close lower.
Lipkow suggested that a similar picture might emerge during the meetings of the US Federal Reserve and the European Central Bank. Current focus remains heavily on inflation figures. In contrast, oil prices are continuing to climb. The earnings season is expected to provide additional momentum, peaking tomorrow and potentially stimulating many industries across both the US and Europe. Additionally, it should not be overlooked that many countries have a shortened trading week due to an approaching public holiday on Friday, typically encouraging risk-averse trading and keeping positions relatively small.
Today’s key economic events include the release of the Conference Board’s US Consumer Confidence index, which could offer interesting insight into American consumer behavior. Companies are also reporting several noteworthy quarterly earnings, including those from Airbus, Starbucks, and T-Mobile US, according to Lipkow.
Turning to key financials, the Euro was weaker in the European currency market on Tuesday morning. The exchange rates quoted were 1.1697 US dollars per Euro, and consequently, one dollar was worth 0.8549 Euros. The price of gold showed a noticeable decline, dropping to $4,634 per troy ounce in the morning, representing a 1 percent fall. This equates to a price of 127.37 Euros per gram. Meanwhile, the oil price rose strongly; a barrel of Brent crude oil in the North Sea cost $111.50 at 9 AM German time on Tuesday, marking a 3.0 percent increase from the previous day’s close.