German shares wrapped up the trading week upbeat in the aftermath of fresh monetary policy easing from the European Central Bank. At closing on Friday, the blue-chip DAX index added 0.38%, marking a second consecutive day in the green. The ECB just reduced its key interest rates yet market watchers are now making bets for the central bank's decision in December.
'Markets made a dovish interpretation of the meeting's outcome, fully discounting a 25bp cut at the next meeting, with a 50% probability of it being 50bp. Short-term yields on euro area sovereign bonds fell, and the euro depreciated to 1.08 against the dollar,' CaixaBank said in a note. Meanwhile, results of the ECB's survey of professional forecasters for the fourth quarter showed that expectations for inflation, real gross domestic product and unemployment in the euro area were broadly unchanged.
For 2024, inflation is still expected at 2.4%, real GDP growth is anticipated at 0.7% and the unemployment rate is expected at 6.5%. In other economic news, data showed that the euro area's current account surplus decreased to 31 billion euros in August from 41 billion euros in the month before. On the corporate front, mwb research maintained its buy rating on Infineon Technologies ($IFX), with a price target of 40 euros, ahead of the German semiconductor manufacturer's fiscal fourth-quarter results on Nov.
12. 'Keep an eye on the EUR 22bn backlog, shrinking for seven quarters; any hint of a rebound could be a game-changer. We expect a modest recovery in 2025,' mwb research said in a note. The stock closed 0.39% lower on Xetra..