DAX Defies the Asian Quake: Stubborn Correction Enters the Next Round!
On Wednesday, the German benchmark index closed in the red for the third consecutive trading day, but the downward momentum is noticeably weakening. At the closing bell, only a marginal deficit of 0.1 percent was on the scoreboard. Although the entire trading day was characterized by severe uncertainty—short-term recovery attempts by the bulls were immediately countered by the bears—the DAX demonstrated astonishing resilience. Despite massive negative cues from Asia, where the Nikkei lost a hefty 3.2 percent, the Frankfurt trading floor proved remarkably weather-resistant and prevented a deeper plunge.
Cracks in the Fed: Why the Market is Ignoring the Hawkish FOMC Minutes!
On the monetary policy front, the latest FOMC minutes caused a stir, revealing a deep division within the US central bank. No fewer than three of the twelve voting members opted for an immediate interest rate hike. The camp of monetary hawks is growing, providing the market with further room for interpretation—flanked by Kevin Warsh's discussed proposal to reduce future FOMC meetings from eight to six per year. Nevertheless, investors reacted prudently: The minutes are considered backward-looking on the trading floor. Since recent macroeconomic data—particularly the weak July job creation of only 23,000 jobs and moderate inflation—massively dampened interest rate fantasies, the probability of a September hike, derived from the FedWatch Tool, plunged to a moderate 31 to 34 percent.
Oil Price Shock and US Consumption: Is the DAX Facing a Technical Turning Point?
The energy sector continues to act as a toxic drag. Driven by the omnipresent geopolitical tensions between the US and Iran, the price of oil climbed 1.5 percent to over $92 per barrel. For today's trading session, the absolute core question is: Can the DAX continue yesterday's stabilization, or will the mix of rising energy costs and interest rate uncertainty bring the index to its knees? The answer could lie on Wall Street this afternoon: The upcoming US retail sales figures will ruthlessly reveal just how robustly the American consumer is actually defying the weakening job data.
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