The DAX began its trading day positively on Friday morning. At around 9:30 AM, the leading index was calculated at approximately 25,100 points, marking a 0.3 percent rise over the previous day’s closing level.
However, geopolitical concerns quickly resurfaced, despite attempts to downplay the situation. According to Andreas Lipkow, Chief Market Analyst at CMC Markets, the conflict in the Middle East “was only absent from investors’ minds for a few hours.” He cautioned that with Iran reportedly unwilling to engage in further talks following the US framework agreement, a renewed military escalation in the region appears likely.
Lipkow remarked that the past weeks have highlighted the immense difficulty and distance remaining to a genuine peace. He questioned why things would suddenly become easier, noting that finding a solution to Iran’s nuclear ambitions remains as significant a hurdle in negotiations as the DAX itself breaching the 25,000-point threshold within the next 60 days.
In Asia, investors had already taken profits. Oil prices only rose slightly, having not yet reflected the stress in the Middle East, as the market still anticipates a diplomatic outcome and regards Iran’s demands and interactions merely as “drumming sticks.”
Today’s trading day is set to be influenced by the tri-fold expiration date on European derivatives exchanges, which is expected to bring higher trading volume and potentially increased volatility in individual stocks. Since US investors are absent due to the holiday, activity in Frankfurt is anticipated to calm down no later than the afternoon.
For the DAX, the target is clear: the index must sustainably surpass the 25,000 level to pave the way for a new all-time high. Conversely, Lipkow warned that if the index were to reverse sharply, a more substantial decline could occur before the summer recess.
On other fronts, the European common currency was slightly weaker this morning: the Euro was trading at $1.1445, while the Dollar cost 0.8737 Euros. In contrast, the gold price declined markedly, dropping 1.4 percent to $4,153 per fine ounce, which equates to 116.66 Euros per gram. Meanwhile, the price of oil increased; a barrel of Brent crude (North Sea variety) stood at $80.17 this morning, representing a rise of 32 cents, or 0.4 percent, from the end of the previous trading session.
