German equities continued a downward trend on Tuesday, following a weak morning start. By midday, the DAX index registered at approximately 23,630 points, representing a decrease of 0.5% compared to the previous trading day’s close.
Despite an unexpectedly positive revision of medium-term economic expectations released by the Centre for European Economic Research (ZEW), the index failed to gain significant upward momentum. The ZEW data, reflecting the sentiment of financial analysts and institutional investors, initially suggested a more optimistic outlook.
“The current month has seen the ZEW expectations balance improve beyond consensus forecasts” noted Ralf Umlauf of Helaba. While the assessment of the current situation registered a decline and initial indicators for the upcoming Ifo business climate survey for Germany were marginally negative, the increase in the expectations balance offers a glimmer of hope for a cyclical revival in the coming quarters. This cautiously optimistic signal, however, appears to be tempering expectations regarding potential interest rate cuts by the European Central Bank.
The euro strengthened against the US dollar during Tuesday afternoon trading, reaching $1.1804, with a dollar correspondingly fetching €0.8472.
Meanwhile, oil prices experienced a decline. Brent crude, a benchmark for North Sea oil, traded at $67.26 per barrel around noon, a decrease of 18 cents, or 0.3%, compared to the close of the previous trading day.