2023-06-14 12:13:15
Dhe Dax surpassed its record high of just a few weeks on Wednesday. Investors continue to expect a pause in interest rate hikes in the United States. It will be exciting in the evening when the US Federal Reserve’s interest rate decision is due. The leading German index rose temporarily by 0.6 percent to 16,336 points, later it was plus 0.4 percent to 16,294 points. The Dax thus expanded its previous annual plus to around 17 percent. The previous record was 16,331 points from May. The Euro Stoxx 50 index for the euro area climbed 0.6 percent to 4373 points on Wednesday.
A large majority of market participants and economists expect on Wednesday that the monetary watchdogs will initially pause after ten interest rate hikes in a row. “US inflation continues to cool, paving the way for the first pause in the Federal Reserve’s 15-month rate-hike cycle,” said market analyst Konstantin Oldenburger of broker CMC Markets. The prospect of a less tight monetary policy in the coming months is driving the leading German index further up in the run-up to the two central bank meetings, Oldenburger added.
After the Federal Reserve (Fed) in the evening, the European Central Bank will also make its next decision on Thursday. In the case of Europeans, however, the market is assuming an increase of another 0.25 percentage points. Hopes that the ECB could soon take things a little easier were recently raised by inflation data from the euro zone. In May, the inflation rate in the euro zone surprisingly fell to 6.1 percent, although this is still well above the ECB’s target.
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Interest rate hike pauses or even an end to the cycle of interest rate hikes are fueling investors’ hopes of better economic development. Because higher interest rates slow them down, as they make financing more expensive for companies and also make consumer and real estate loans more expensive.
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