The DAX started its trading session on Thursday sluggishly, although it managed to somewhat mitigate earlier losses. Shortly after 9:30 AM, the index stood at 23,880 points on the Frankfurt exchange floor, representing a decrease of 0.3 percent compared to the previous day’s closing figure.
Concerns regarding newly released figures from the Federal Statistical Office are weighing on investors. Preliminary estimates indicate that retail sales in March dropped by a real two percent compared to February. Commenting on the data, Thomas Gitzel of VP Bank stated that “the retail sales figures for March give a preview of the economic damage caused by the Iran war. If more money is spent at the gas station, less will be left for other forms of consumption”.
Private consumer spending in March suffered due to a reduction in purchasing power caused by rising energy costs, which suggests negative growth implications. Gitzel also pointed out that “it is becoming clearer that a second-round effect will occur. This means that companies will pass on their higher purchasing costs to their selling prices”. He warned that if prices increase across the board, this pressure will weigh on private consumption in the coming quarters as well.
Concerning global markets, the European community currency was slightly stronger on Thursday morning. The Euro exchanged for $1.1677, meaning a dollar was available for 0.8564 Euros. In other market movements, oil prices climbed sharply. At about 9 AM German time on Thursday, a barrel of North Sea Brent crude cost $121.80, marking a 3.2 percent increase from the close of the previous trading day.