DE 40 forecast: the index is testing support
The DE 40 stock index may enter a downtrend if the support level is broken. The DE 40 forecast for today is positive.
DE 40 forecast: key trading points
Recent data: Germany’s inflation rate came in at 2.1% year-on-year
Market impact: the data creates a negative backdrop for the German equity market
Fundamental analysis
Annual inflation in Germany came in at 2.1%, above expectations of 2.0% and up from the previous reading of 1.8%, meaning price growth accelerated and slightly exceeded the forecast. For the equity market, this is important primarily through expectations for monetary policy: higher inflation reduces the scope for rapid policy easing and increases the likelihood that interest rates in the eurozone will remain elevated for longer than the market had anticipated.
For the DE 40 index, the effect is more often moderately restraining in the short term. Accelerating inflation does not in itself signal an economic downturn, but it raises the risk of more expensive financing and more cautious profit expectations in sectors sensitive to interest rates and domestic demand.
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