Germany’s DAX index experienced continued downward pressure midday Monday, building on a weaker start to the trading day. Around 12:30 PM local time, the index was calculated at approximately 24,300 points, representing a decline of 0.3 percent compared to the previous trading day. Leading the decliners were Rheinmetall, Commerzbank and Deutsche Bank, while Siemens Energy, RWE and Zalando lagged behind.
The Ifo Business Climate Index for August, released earlier in the day, offered limited impetus to the market. While registering a sixth consecutive increase, the rate of improvement remained slow. Thomas Gitzel, Chief Economist at VP Bank Group, noted the index, though positive, remains at low levels, mirroring the current state of the German economy. He highlighted that Germany’s GDP contracted by 0.3 percent in the second quarter, indicating a lack of substantial economic recovery.
A positive element noted was the increased optimism among companies regarding their future business outlook, despite ongoing trade disputes. The relevant sub-index improved from 90.8 to 91.6, demonstrating a degree of resilience. Combined with the continued, albeit moderate, recovery of the Purchasing Managers’ Index, there remains hope for a slight economic upturn.
Gitzel indicated that anticipated interest rate cuts by the European Central Bank and substantial infrastructure spending pledged by the German government are projected to be key drivers of any potential economic improvement. However, he also cautioned that increased US tariffs are simultaneously dampening growth prospects, suggesting that the sluggish pace of improvement in the Ifo Business Climate Index accurately reflects the broader economic situation.
The Euro weakened against the US dollar midday Monday, trading at 1.1692 US dollars. Conversely, one US dollar was worth 0.8553 Euros.
Meanwhile, the price of oil rose, with a barrel of Brent crude trading at approximately 68.16 US dollars around 12:00 PM Central European Time – a gain of 43 cents, or 0.6 percent, from the previous closing price.
