The German stock market benchmark, the DAX, maintained a positive trajectory on Tuesday, extending gains from an encouraging start to the trading day. By midday, the index was calculated at approximately 24,205 points, representing a 0.2% increase compared to the previous day’s closing value. Sartorius, Brenntag and Zalando led the performance list, while Commerzbank, Rheinmetall and Siemens Energy concluded with the weakest results.
Sentiment among financial analysts and institutional investors regarding the medium-term economic outlook continued to improve in July, according to data released by the Centre for European Economic Research (ZEW). Thomas Gitzel, Chief Economist at VP Bank Group, stated that “Financial market analysts surveyed by the ZEW remain optimistic”. However, he cautioned that the impact of recent tariff escalations may have been only superficially reflected in the survey.
The prevailing confidence in the economy is largely attributed to planned infrastructure spending by the German government, as well as expectations surrounding interest rate cuts implemented by the European Central Bank (ECB), which are seen as potentially stimulating economic development through more favorable financing conditions. Hopes for a resolution to the ongoing trade dispute with the United States also contribute to the positive outlook.
However, Gitzel issued a note of caution, suggesting that the optimism might be excessive. “Order intake for Germany’s manufacturing sector disappointed in May. The upward trend observed in previous months in new orders was erased by the May data”. He emphasized that the trade policies of the U.S. President pose a significant risk for German industry. Even if a negotiated solution is reached, the existing uncertainties may have already caused considerable damage. “The higher the uncertainties, the less investment occurs” he explained.
The Euro strengthened slightly against the U.S. dollar by midday on Tuesday, trading at $1.1678, or €0.8563 per dollar.
Meanwhile, oil prices declined. Brent crude, a benchmark North Sea variety, was trading at $68.96 per barrel around midday German time, a decrease of 25 cents, or 0.4%, compared to the previous day’s closing price.
