The DAX index in Germany demonstrated remarkable performance, marking its eighth consecutive closing in the green, with a notable rise of 1.66% on Thursday. This positive shift comes in the wake of unexpected cooling in US inflation figures, which have sparked optimism regarding potential monetary policy adjustments in the world's largest economy. According to recent data released by the Bureau of Labor Statistics, the annual inflation rate in the United States recorded a decrease to 2.9% in July.
This figure stands in contrast to both previous estimates and the consensus expectation, which had pegged the rate at 3%. Additionally, the core inflation rate aligned with forecasts at 3.2%, yet it showed a decline from the 3.3% observed for June, thus contributing to a more favorable outlook on monetary policy. In light of these developments, Macquarie has reiterated its forecast predicting a 25-basis-point cut in interest rates by the US Federal Reserve in September.
Analysts from the institution emphasized that any further rate reductions are also likely during the Federal Reserve’s meetings scheduled for November and December. They explained that the extent and timing of such easing will heavily depend on the upcoming economic data, particularly focusing on inflation and employment metrics, which are expected to play a crucial role in shaping the monetary landscape. Meanwhile, it was a relatively quiet day for economic news within Germany and the broader eurozone.
However, energy company RWE ($RWE) managed to stage a notable recovery, closing 1.28% in the green after a significant 5.70% decline the previous day, which was linked to its financial update for the first half of the year. In the defense sector, BofA Global Research has upheld its buy rating on Rheinmetall ($RHM), following the company’s announcement regarding its acquisition of the US-based defense manufacturer Loc Performance.
The research group indicated that Rheinmetall, which operates in both the automotive and arms sectors, possesses sufficient liquidity to execute the acquisition, projecting a robust cash position of 1 billion euros by the end of 2024. At the close of the trading day, Rheinmetall also showed positive movement, ending up 0.93% higher on the stock exchange. As the DAX continues its upward trajectory, the implications of economic data on both local and international markets remain a central point of focus for investors and analysts alike..