The German stock index (DAX) opened higher on Wednesday morning. At roughly 9:30 am, the index was at about 23,845 points, up 0.5 % on the previous close. The leading stocks were Heidelberg Materials, Deutsche Bank and Siemens Energy, while the bottom of the list included Deutsche Telekom, Hannover Rück and FMC.
Jochen Stanzl, chief market analyst at Consorsbank, said that during the third week of the Iran‑Turkey conflict the DAX is “seriously trying to stabilise”. He added that investors hope Iran’s tight grip on the global energy market will gradually ease. “Worldwide political pressure on U.S. President Trump is mounting to make the Strait of Hormuz navigable again” he said.
Stanzl also pointed out that Saudi Arabia and Iraq are shifting their exports. “They use pipelines to move oil to safe ports” he explained, noting that this shift is significant for the oil market. Even if it does not allow these countries to export all of their production, the Iranian blockade will lose some of its importance.
Regarding the futures market, Stanzl remarked that traders are already looking ahead, thinking about what will remain of the oil price rise. “Central banks will speak on these matters tomorrow and the day after” he added. “Statements from the Federal Reserve and the ECB will help investors assess inflation risks more accurately”. Many were hoping that Middle‑East supply chains would revive, though not entirely, and that inflation expectations should stay stable. “No one wants a new inflation wave after the last one has not yet been fully processed” he said.
On currency markets, the euro was slightly weaker at the time. One euro was worth 1.1518 U.S. dollars, while one U.S. dollar was equal to 0.8682 euros.
Oil prices dipped in the meantime. Around 9:00 am German time, Brent crude from the North Sea was trading at $102.30 per barrel, down 115 cents or 1.1 % from the previous day’s closing price.