Inflation data from the US briefly drove the Dax to its highest level since January 2022 on Wednesday. After a jump to 15,827 points, the leading German index was only up 0.31 percent to 15,703.60 points at the close, which at least continued the positive development of the past two trading days. The MDax of medium-sized stocks ultimately even lost 0.40 percent to 27,340.86 points.
US consumer prices rose more moderately than expected in March. They recorded the weakest increase since May 2021. The core inflation rate, on the other hand, rose as expected.
Inflation data are in focus because they are of great importance for the monetary policy of the US Federal Reserve. Most recently, the financial markets were expecting a key interest rate increase of 0.25 percentage points in May. But an unchanged interest rate is not ruled out either. It is still uncertain to what extent the recent turbulence in the banks will affect lending and inflation.
inflation
When the prices of services and goods increase in general – and not just individual product prices – this is referred to as inflation. It means that today consumers can only buy less for ten euros than yesterday. In short, the value of money decreases over time.
The inflation rate, also known as the inflation rate, provides information about how high or low inflation is at the moment.
All goods and services that are consumed or used by private households are used to determine the inflation rate. The European Central Bank (ECB) describes this as follows: “To calculate inflation, a fictitious basket of goods is put together. This basket of goods contains all the goods and services that private households consume or make use of over the course of a year. Each product in this cart has a price. This can change over time. The annual inflation rate is the price of the entire basket in a given month compared to the price of the basket in the same month of the previous year.”
An inflation rate of less than two percent is considered “bad” by many experts, as it can be a sign of weak economic growth. These low interest rates are also a problem for savers. The ECB’s target is an annual inflation rate of below, but “close to, two percent”.
Analyst Konstantin Oldenburger from broker CMC Markets spoke of the positive development of the leading index as “partly good news for the stock market, since the interest rate hikes by the central banks seem to be having an effect. However, investors are not yet sure how to interpret the data.” The development “should calm the nerves of the Fed a little”, Commerzbank commented on the data with a view to the further monetary policy of the US central bank. She expects two more rate hikes of 0.25 percentage points each. “However, core inflation is still uncomfortably high,” said analyst Ulrich Wortberg from Landesbank Hessen-Thüringen (Helaba).
Enthusiasm about the data also quickly subsided on the European stock exchanges: the leading eurozone index EuroStoxx 50 and the French Cac 40 closed with only minimal gains, while the London FTSE 100 rose by 0.5 percent in the end. On the New York Stock Exchange, the leading index Dow Jones Industrial was slightly up at the end of trading in Europe, while the technology-heavy Nasdaq 100 fell by 0.4 percent.
The euro was also boosted by the US inflation data and last rose to $1.0963. The European Central Bank set the reference rate at $1.0905 on Tuesday. On the bond market, the current yield rose from 2.26 percent on the previous day to 2.34 percent. The Rex pension index fell by 0.01 percent to 126.17 points. The Bund future gained 0.07 percent to 135.96 points.
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