- Germany CPI in March rose 2.3%.
- Energy prices in Germany are rising on Friday by 3.5%. .
- Utilities sector shows the strongest gains.
DAX index started the day with gains. However, the price in the second half of the day continued its decline similar to the rest of the week. The utilities sector rose by +2.63%. The leaders in gains are RWE (+3.27%) and Siemens Energy (+2.18%). Companies growth is mainly influenced by rising energy prices, which increased today by +3.5% to 60.95 euro/MWh. Despite the increase, it remains below the weekly average of 66.5 euro/MWh. The basis for such increases is a sharp rise in gas prices, which recorded a +7.5% daily increase. After the ECB conference, the euro continues to experience strong declines against the dollar and German 10-year bond yields have fallen to 2.37%. Yield declines to the lowest levels in 2 weeks have been strengthened by German inflation data. March CPI in Germany rose 2.3% year-on-year and 0.4% month-on-month. These results were in line with market expectations.German inflation has fallen to its lowest levels since June 2021.
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Create account Try a demo Download mobile app Download mobile appDAX index compared to the 10-year German bonds yields. Source: Bloomberg Finance L.P.
This week, the price of the DAX index contract (DE40) is following within a clear downward trend channel initiated at the end of March. The price is currently within a narrow range limited above by resistance from yesterday's peaks at 18381.3 points and below by support from April 10th at 18337.1 points. With the current trend, there are many indications that the demand side will lack the strength to break out of the downward trend, although calm inflation data and low yields may stimulate buyers. Source: xStation
Company news:
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Thyssenkrupp (TKA.DE) announces a year-on-year reduction in steel production by 22%. Faced with a production decline, the company announces significant layoffs. In its largest factory in Duisburg, there may even be layoffs numbering in the thousands. This move by the company is in response to increasing pressure from the Chinese market, which, combined with higher energy prices in Germany, makes it difficult for the company to operate in the steel market. The market positively received the company's statement, and the quotes rose by 1.5%.
- RWE (RWE.DE) has issued its first green bonds listed in dollars. The total value of the issuance amounted to $2bln and was met with high investor's interest. The company recorded 3.8 times higher demand for the instrument than the issuance value. In the future, RWE plans to continue issuing bonds in the US market, with the company estimating a volume of bonds around 3-3.5 billion (both listed in euros and dollars). With current interest rates, obtaining financing for the development of green energy is positively perceived, as evidenced by the company's stock price, which is rising today by +3.27%.
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