The DAX started the trading day on Wednesday with slight gains. Around 9:30 a.m., the leading index was measured at approximately 25,490 points, marking a 0.3 percent increase over the previous day’s closing level. The top performers on the index included Hochtief, Siemens Energy, and Infineon, while Zalando, SAP, and Volkswagen finished near the bottom of the rankings.
The main focus for the day was the new interest rate decision by the US central bank, the Federal Reserve, scheduled for the evening. Thomas Altmann from QC Partners noted that it is another “Fed day,” which means it is one of those trading days that truly kicks off in the evening. The markets priced in a 94 percent probability of a 25 basis point rate hike. This move would place the US key interest rate between 3.75 and 4 percent, representing the first increase since 2023.
Altmann stated that if this occurs, the downward cycle that began in 2024 would be effectively ended. He suggested that the high inflation rate coupled with a robust US economy makes a rate increase likely, though not certain. Furthermore, he mentioned that Fed Chair Kevin Warsh is known to be significantly less predictable than his predecessors. In addition to the decision itself, observers are also keen to watch the voting outcome, as this will indicate how much the Fed is aligned behind Warsh.
Meanwhile, the Euro strengthened slightly in the morning. The Euro exchanged for $1.1547, while the US Dollar was trading at 0.8660 Euro.
Oil prices saw a minor dip. Around 9 a.m. German time, a barrel of North Sea Brent crude cost $107.50, which was 126 cents, or 1.2 percent, less than at the close of the prior trading day.
