Flash euro zone inflation for March surprised with a larger-than-expected 1.6% drop during the month falling to 6.9%, down from 8.5% the prior month. This is the fifth consecutive monthly decline, however; the reading remains well above the European Central Bank’s target of 2%.
Core inflation, which excludes the volatile food and energy items, ticked up and hit a new record high of 5.7% for the bloc in March, putting enormous pressure on European Central Bank officials to continue on with further interest rate hikes.
Last month the ECB raised its main interest rate to 3% but did not offer guidance for its next meeting on the 4th of May, citing that the recent financial turmoil requires caution. Since then, however; several policymakers have signalled that more tightening might be necessary. While the decision of the ECB would be data-depended, markets have fully priced in a 25-basis point rate hike in May and another 25-basis point increase in June.
German equities posted healthy gains over the past six months, and investors have remained pretty buoyant despite the latest banking turmoil and the surprise production cut on Sunday by OPEC+ which triggered a sharp spike in oil prices at the beginning of the week.
Higher oil prices could filter through the global economy and have a significant inflationary impact. This is certainly a worry for central banks which have been trying to fight sky high inflation over the past year.
Earlier this week data showed that manufacturing activity in the euro zone remained in contraction territory, raising fears of an economic slowdown in the bloc. However, German exports posted their biggest monthly rise since June in February, boosting hopes the country may avoid recession in the first quarter of 2023.
The S&P Global Germany Services PMI was revised slightly lower to 53.7 in March of 2023 from a preliminary estimate of 53.9 but continued to point to the strongest growth in the services sector since May last year.
Data released on Thursday showed that Industrial production in Germany surged 2.0% month-on-month in February, beating market forecasts of 0.1%. The DAX 40 traded higher on the news but risk sentiment remains fragile as the economy is slowing down.
The banking crisis has not dented demand for stocks and the Frankfurt benchmark index managed to reclaim its pre-banking turmoil highs. Hopes that the ECB may be approaching the end of its aggressive interest rate hiking cycle is supporting the equity market.
The DAX 40 index is holding up its last week’s gains, despite concerns about the spike in oil prices and the slowing manufacturing activity data. However, given the proximity to the multiple resistance around 15,700 combined with worries that the economy is cooling, further gains from here may be limited.
While at this point there is no reversal signal evident on the daily chart, we note the formation of a bearish divergence between the price and the Relative Index Indicator, which suggests that the rally from the September 2022 low might be approaching a turning point.
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Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.
Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.
Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.
Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.
Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.
È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.
Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.