On Wednesday, the Dax index decreased. At the Xetra closing, the index was calculated at 2,399 points, a 0.3% increase compared to the previous day’s close. After a cautious start, the Dax recorded gains in the afternoon.
“The inflation data from the US, within the range of expectations, is no showstopper for the ongoing rally in the Dax” commented Jochen Stanzl, chief market analyst at CMC Markets. “It gives investors no reason to switch to a profit-taking mode. The Fed will not be deterred by the numbers and will lower interest rates again next week.”
The “80-20 rule” seems to also apply to modern monetary policy, Stanzl said. “The last 20% of the work to combat inflation requires 80% of the time. The US consumer price index shows solid price increases for the fourth month in a row.”
The progress towards lower inflation is thus stalling, the analyst explained. “Either the Fed accepts a higher inflation target or it takes a pause after the meeting next week. The latter is more likely, especially since the labor market remains robust and does not require the Fed’s immediate attention.”
Until just before the closing, Vonovia’s shares were at the top of the list in Frankfurt. RWE, BMW, and Bayer’s papers, however, formed the tail end.
Meanwhile, the gas price fell: a megawatt-hour of gas for delivery in January 2025 cost 45 euros, two percent less than the previous day. This implies a consumer price of at least around nine to eleven cents per kilowatt-hour, including additional costs and taxes, if the price level remains so permanently.
The oil price, on the other hand, rose significantly: a barrel of Brent crude cost 73.06 US dollars at around 5 pm German time, an increase of 87 cents or 1.2% from the previous day’s close.
The European common currency was weaker on Wednesday afternoon: one euro cost 1.0491 US dollars, and one dollar was worth 0.9532 euros.