23.07.2019 – Daily report. Germany’s leading index got off to a successful start today and is currently trading at 12,394 points, an impressive 0.9 percent higher. This is likely to be triggered by the ECB’s continuing prospect of a rate cut.
ECB in focus
Although the European Central Bank meeting will not take place until Thursday of this week, investors are already giving advance credit to this important event. According to analysts, the probability of an interest rate cut by the current ECB boss Mario Draghi to 50 percent is estimated. As at every meeting of the ECB Council, every word should be scrutinized this time, especially with regard to possible bond purchases by the ECB.
The ECB’s decision may also affect the American central bankers, who will announce their decision on the US interest rate next week.
Wait and see on Wall Street
The American stock exchanges ended yesterday’s trading almost unchanged. The Dow Jones Index closed the day with a slight gain of 0.3% at 27,252 points. The broader S&P500 also gained 0.3 percent to a level of 2,993.50 points. Currently, the talks in the trade conflict with China continue to dominate events on the US stock exchanges.
Show Down in London
At noon all eyes should be on the capital of the United Kingdom. At this time it should be clear whether the Brexit hardliner Boris Johnson will become the new Prime Minister and expel Theresa May from her office in Downing Street No. 10. Johnson is the media’s favourite over his opponent Jeremy Hunt.
Euro continues to fall
The exchange rate of the European single currency continues to lose ground and for the first time since June has dropped below the psychologically important 1.12 US dollar mark again. This is probably due to the current stability of the US dollar, which is strongly reflected against the backdrop of a budget package adopted in the USA.
This is what the day brings
In addition to the above-mentioned event in the London Parliament, investors are likely to look at economic data from the U.S. this afternoon. At 4:00 p.m., the latest figures (June) for existing home sales will be released. Analysts’ expectations are currently at 5.35 million units.
Around 22:30, the API report on US Crude Oil Stocks will follow.
Bernstein Bank wishes you successful trades.
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