INFLATION SHOCK: US Numbers Send Dax into Freefall – What’s Next for Global Markets?

INFLATION SHOCK: US Numbers Send Dax into Freefall - What's Next for Global Markets?

The Dax started the trading day on Wednesday with slight losses. By 9:30 am, the leading index was calculated at around 20,315 points, 0.1 percent below the closing level of the previous day. Vonovia, Rheinmetall, and Fresenius led the list of stocks, while Zalando, Siemens Energy, and Adidas ended at the bottom.

The focus of the stock market is on the US inflation rate for November this week. “Investors and analysts expect prices to have risen a bit stronger in November” said Thomas Altmann of QC Partners. The November inflation rate is the last major hurdle before a potential interest rate cut by the Fed in the coming week. “A negative surprise could still make the Fed think twice and, in addition, slow down the interest rate expectations for next year.”

The Christmas rally is currently pausing, as Altmann said. Ahead of the ECB’s interest rate decisions on Thursday and the Fed’s in the coming week, fewer investors are willing to take on new risks. “The fear of being caught off guard is particularly great just before the end of the year. Many therefore prefer to at least secure a part of their gains.”

The European common currency was weaker on Wednesday morning: one euro cost $1.0499, and one dollar was worth $0.9525 euro.

Meanwhile, the oil price rose: a barrel of North Sea Brent crude cost around $72.43 by 9 am German time, which was 24 cents or 0.3 percent more than at the end of the previous trading day.