The ECB delivered as expected, lowering interest rates again and giving the German stock index the impetus to climb to a new all-time high. At first glance, this looks very convincing to investors, but the price development after the all-time high gives cause for concern. Although the DAX closed positively with a gain of 0.19 percent at a closing price of 24,323.58, it was already evident at that time that slight profit-taking began after the all-time high. The DAX experienced selling pressure and could not close above the price range in which the index has been stuck for more than five trading days. A breakout from this price range would require a closing price above 24,400 points.
Bayer Jumps, Heidelberg Materials Heads Towards 200 Euros
The decisive factor for yesterday's all-time high on Thursday was the ECB's decision to cut the key interest rate again by 25 basis points, as expected by the market. However, the all-time high was already reached before the decision, meaning that market expectations were ultimately met, but there was no positive surprise. The ECB justified this step by stating that inflation has settled well around 2 percent and the economy is facing headwinds.
Yesterday's top performer in the DAX was Bayer's stock with a price gain of 4.4 percent, followed by Commerzbank's stock, which gained 3.5 percent and is once again among the top three. Heidelberg Materials' stock, whose growth has resumed after a brief correction, is back on track towards 200 Euros.
Euro Remains Stable Above 1.14 US Dollars After ECB Decision
The euro reacted calmly to the ECB's decision, closing with a daily gain above 1.14 US dollars. Investors were not entirely convinced by the ECB's move, but Christine Lagarde seems to have found a good way to justify the interest rate cut so that the euro at least did not weaken. She thus managed the balancing act of not jeopardizing the ECB's goal of a strong euro against US tariffs despite an interest rate cut.
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.