German actual CPI calculated for the month of March was 9.2%. Germany's DAX rose to all-time highs (since March), according to Harmonized Index data published on a Eurostat press release.
Indices began the day higher, led by big tech and other sectors that reported higher-than-expected corporate earnings, as investors appeared to ignore troubling signals from the Treasury market that the yield curve had inverted. It had reached its lowest point since the 1980s.
Economists view the inversion of the yield curve as a sign of impending recession. This year's heady rally in growth stocks has regained traction, with Tesla Inc. (TSLA) more than doubling in value from an intraday low in January.
The Walt Disney Company announced plans for a major restructuring of the world's largest entertainment company, including 7,000 job cuts and a $5.5 billion cost-cutting measure. Profits at PepsiCo Inc. (PEP) exceeded expectations, indicating that retail consumers are unaffected by inflation and are absorbing higher prices.
However, as the session progressed, the stock indices lost steam and ended relatively unchanged, indicating that investors require new incentives to maintain risk appetite, which can only come from economic data such as the CPI, which is released next Tuesday. After last Friday's non-farm payroll figure dampened market enthusiasm, a confirmation of the downward trend in inflation, particularly in core CPI data, would boost investor sentiment.
Treasury yields remained stable, with the 10-year bond yielding around 3.60%. The dollar experienced a roller coaster ride, beginning with weakness as stocks rallied and returning to the starting level in the afternoon as indices pulled back from highs.
In Europe, the CPI figure for Germany is noteworthy, having fallen to 9.2% in harmonized year-on-year data, which is still high but lower than the previous month. In any case, it was enough to propel the German DAX index to new highs not seen since March 2022.
Technically, the index is overbought on the daily chart and thus vulnerable to technical corrections following the rally that began in October of last year.
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Sources: Bloomberg, Reuters