The German market started the day on Thursday with softness, though investment losses were somewhat mitigated in the initial minutes. Shortly after 9:30 a.m., the Frankfurt exchange ticker showed 23,880 points, representing a 0.3 percent decline compared to the previous close.
Concerns over new data released by the Federal Statistical Office are weighing on investors. Preliminary estimates indicate that retail sales in March declined by a real two percent compared to February. Thomas Gitzel of VP Bank commented that the March figures offer a preview of the economic damage caused by the war in Iran. He noted that when less money is spent on essential items like fuel, less is available for other forms of consumption.
Private consumption was negatively impacted in March due to a reduction in purchasing power caused by higher energy prices, which suggests negative growth implications. Gitzel also warned that it is becoming clearer that a second-round effect is likely: companies are passing their higher purchasing costs on to their selling prices. He warned that if prices rise broadly, this will also weigh down private consumption in the coming quarters.
In other economic news, the European common currency was slightly stronger on Thursday morning, with the euro trading at $1.1677 per dollar. Meanwhile, the oil price rose significantly, with a barrel of North Sea grade Brent costing $121.80 at 9 a.m. German time, a 3.2 percent increase from the previous day’s close.
