The DAX started positively on Thursday morning. Around 9:30 a.m., the leading index was recorded at approximately 25,055 points, marking a gain of 0.5 percent over the previous day’s closing level.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that even though a lasting peace in the Middle East is still far off, the signing of a framework agreement to end the war has temporarily taken the issue off the trading radar, allowing focus to shift to other markets.
Regarding central banking, Lipkow commented that new Fed Chairman Kevin Warsh surprised at least most market participants yesterday, and perhaps many caught off guard. While the Fed kept interest rates unchanged as expected, the monetary policy committee seems to be significantly more concerned about inflation than previously thought. Half of the voting members still anticipate at least one rate hike this year, with six noting the possibility of an even wider tightening. Only one member expects a decrease in interest rates during the current year; this outcome has dispelled market hopes for rate cuts and led to some sense of disappointment.
Trading in Asia was largely boosted by the geopolitical easing in the Middle East, with both the Nikkei and Kospi reaching new all-time highs. Conditions in China, however, were less favorable, as economic indicators remain weak, causing investors to tend to shift into financial markets offering greater potential for currency gains.
Lipkow also pointed out that today’s agenda includes the central bank meetings of the Bank of England and the Swiss National Bank, along with the release of initial unemployment benefit claims and the Philly Fed Index in the US.
The European common currency saw some strength on Thursday morning, with one Euro trading at $1.1512, and consequently, the US dollar selling at €0.8687.
The price of gold benefited significantly, rising to $4,308 per fine ounce in the morning (+1.1 percent), equating to €120.30 per gram. Meanwhile, the oil price fell sharply; a barrel of North Sea Brent crude cost $77.91 around 9 a.m. German time on Thursday, representing a decrease of 2.1 percent or 164 cents compared to the previous day’s close.
