Minimum-Wage Employee, Identified as Dax, Begins Work
The US-China trade truce extension, as announced by President Donald Trump, has provided a boost to global markets, according to Thomas Altmann of broker QC Partners. However, the outlook for US consumer prices shows an expected rise in inflation through the end of 2025, influenced by tariffs and trade policies.
Economists from Goldman Sachs and J.P. Morgan anticipate year-over-year core CPI inflation rising to about 3.1-3.3% by December 2025, with headline inflation near 2.8-2.9%. This rise in inflation is partly due to the ongoing tariffs, despite the US-China trade truce. The continued pass-through of import duties is expected in categories like household furnishings, recreational goods, used cars, and airline fares, though gasoline and new car prices might soften slightly. Food prices are expected to increase moderately but at a slower pace than the 20-year average, with certain categories such as beef, veal, and sugar rising faster than typical historic rates.
In the European stock market, the Dax and MDax indices showed positive movements. The Dax, Germany's benchmark index, rose by 0.3% to 24,156 points at the opening on Tuesday. Sartorius shares gained more than 3% and outperformed other Dax stocks due to an upgrade by Jefferies analysts, who raised their rating on Sartorius from "Hold" to "Buy". The Dax record high reached last month of 24,639 points remains within reach. The MDax, on the other hand, rose by 0.1% to 31,299 points.
However, Hannover Rück shares fell by more than 2% due to eroding prices in the reinsurance market, a trend also seen in the world leader Munich Re. The implied probability of a 25 basis point move in September remains high at 88%, according to Commerzbank. Resistance in the 24,500 point range was observed for the Dax.
Despite these positive movements, there is some uncertainty among investors about the quality of economic data due to recent events at the statistics agency BLS. No new geopolitical tensions are expected until November 10 due to the extension of the US-China trade truce.
| Aspect | Outlook | |--------------------------|------------------------------| | Core CPI Inflation | Expected rise to ~3.1-3.3% YoY by end of 2025 | | Headline CPI Inflation | Expected near 2.8-2.9% YoY by end of 2025 | | Monthly inflation growth | 0.2% to 0.4% anticipated, driven by tariffs impact | | Food Prices | Moderate increases in certain categories, slower than historic average overall | | Impact of US-China truce | Partial easing but tariffs still sustain inflation pressures | | Dax and MDax Performance | Positive movements, with Sartorius outperforming | | Reinsurance Market Prices | Eroding prices, affecting Hannover Rück and Munich Re | | September Rate Cut Probability | High at 88%, according to Commerzbank | | Dax Resistance Level | Observed at 24,500 points | | Geopolitical Tensions | No new tensions expected until November 10 | | Data Quality Uncertainty | Due to recent events at the statistics agency BLS |
- The rising core and headline CPI inflation, as anticipated by economists from Goldman Sachs and J.P. Morgan, is primarily due to the ongoing tariffs and trade policies between the US and China, despite the extended truce.
- In the European stock market, despite some uncertainty among investors about the quality of economic data due to recent events, the Dax and MDax indices showed positive movements, with Sartorius significantly outperforming other Dax stocks. However, eroding prices in the reinsurance market have affected Hannover Rück and Munich Re.
