German equities faced a downturn on Monday, as the DAX index fell by 0.19%, mirroring a cautious sentiment among investors in anticipation of upcoming monetary policy decisions scheduled for later this week. The European Central Bank (ECB) and the Swiss National Bank (SNB) are set to unveil their latest interest rate adjustments on Thursday, with expectations of both central banks reducing their respective key rates by 25 basis points.
BofA Research commented, 'The ECB should cut 25bp, and at each meeting thereafter until the depo rate is at 1.5% in September 2025. Data dependence will stay but will come with directional guidance to a return to neutral.' They added that the SNB might also implement a 25bp cut, halting at a terminal rate of 0.5% by March 2025.
However, they indicated that the timing of the upcoming December cut, whether to be 25bp or 50bp, remains a tight decision. Additionally, critical economic data releases, including inflation statistics and industrial production metrics from key eurozone countries, are on the agenda for this week. In corporate news, HelloFresh experienced a significant drop of 9.79% following a report by ABC News revealing that the US Department of Labor is investigating accusations of child labor linked to one of its facilities in Illinois.
The German meal kit provider responded by stating its immediate termination of the working relationship with Midway Staffing upon learning of the allegations, underlining its strict zero tolerance approach to child labor. Meanwhile, CompuGroup Medical announced its agreement to be acquired by CVC Capital Partners for 22 euros per share in cash, which will result in the group's delisting after completion of the acquisition.
On this news, the medical software developer's shares rose by 31.43% at market close. Baader Helvea commented, 'While CVC's intended offer reflects a noticeable premium compared to the 3M VWAP and the closing price as of 6-Dec-24, it is unattractive looking at historical valuations. With the founding family planning to remain invested post-transaction, we believe that the founders see considerably higher intrinsic value in CompuGroup than EUR 22.'.