The Dax saw a slight pullback at the start of the week. At the close of trading on Xetra, the index was calculated at 26,006 points, marking a decrease of 0.2 percent compared to the previous day’s close.
Andreas Lipkow, Chief Market Analyst at CMC Markets, commented that “without impulses from New York, there wasn’t much going on in the Dax today.” He noted that investors remained on the sidelines, keeping an eye on price movements in the energy markets. He cited a calculation by the Brown University in the US suggesting that the conflict in Iran alone has cost roughly $100 billion in additional costs due to rising gasoline prices-money that has been drawn away from consumption. This figure does not account for the further consequences of interest rate hikes or the price effects of increased transport and logistics costs.
Lipkow added that the situation in the Middle East is deteriorating, showing no signs of improvement. Rising oil prices are particularly straining German industrial companies and negatively impacting consumer behavior across Europe, creating a complex environment that makes it difficult for the German economy to perform well. Despite these challenges, recent indicators hint at a stabilization and minor recovery trends at a low level. However, disappointment mounted today over expected industrial production, which declined by 1.1 percent.
Regarding the current calm in the stock market, Lipkow expressed hope that this is not just a lull before the storm, especially given that September is often a turbulent month for the stock exchange. He mentioned that smaller storms are already sweeping through the currency market, with the dollar-to-yen pair being in flux for several trading days. The Bank of Japan is engaging in a desperate effort to counteract numerous hedge funds aiming to devalue the yen. Currently, this effort appears to be funded only through the sale of US government bonds, which in turn drives up yields. This constitutes a complicated situation for both Japan and the US, as Japan, alongside China, is one of the largest holders of US government debt.
The European common currency showed some strength on Monday afternoon. The Euro cost $1.1629, meaning the dollar was available for 0.8599 Euros. Meanwhile, the price of gold weakened, falling to $4,412 per troy ounce in the afternoon (-0.4 percent), which translated to 121.98 Euros per gram. In contrast, the oil price surged noticeably. At around 5 PM German time on Monday afternoon, a barrel of Brent North Sea crude cost $97.63, representing a 1.4 percent increase from the close of the previous trading day.
