- Germany's blue-chip index opened the session in better sentiment
- EU Commission forecasts slowdown in eurozone inflation in 2023
- German inflation still high but in line with expectations
Friday's session in Germany brings a continuation of improved investor sentiment, after Wall Street experienced a frenzied upward rally in the face of lower CPI and core inflation readings. Gains were made in the shares of Covestro, Volkswagen, Puma, Adidas and Zalando. Shares of Deliveryhero and Uniper, which have seen massive weakness in this recorded double-digit gains today.
Benefiting from 'war' market sentiment in the first half of the year, the shares of German arms manufacturer Rheinmetall are losing nearly 4%. Shares of Deutsche Telekom, whose financial results disappointed investors, are also doing poorly.
Investor attention in Germany focused on the CPI and HICP inflation readings for October, the data was released at 8:00 a.m. Both readings came in line with expectations:
CPI inflation: 10.4% y/y vs. 10.0% previously, HICP Inflation:11.6% y/y, 1.1% m/m
The European Commission today shared its forecasts for Eurozone economics:
- Eurozone inflation of around 8.5% in 2022, will slow to 6.1% in 2023 and to 2.6% in 2024.
- Eurozone GDP to grow by 3.2% in 2022, slowing to 0.3% in 2023 and accelerating to 1.5% in 2024.
- Eurozone unemployment will be 6.8% in 2022, rise to 7.2% in 2023 and fall again to 7.0% in 2024.
- EU Economic Affairs Commissioner Gentiloni indicated that core inflation will be higher than CPI inflation in 2024
The main reasons for Germany's high inflation are, of course, the still huge price increases in energy products. Rising food prices are also particularly felt by households. According to the Federal Statistical Office (Destatis), consumer prices in October 2022 rose by 0.9% compared to September 2022. Source: Statistisches Bundesamt Chart of the
DE30, D1 interval. The benchmark German blue-chip index continues its gains today and is approaching local peaks from June this year. Source: xStation5
Deutsche Telekom (DTE.DE) shares, H1 interval. The German giant's shares continue the downward movement from yesterday's session. The declines stopped at the 38.2 Fibonacci elimination from where sentiment may improve. The RSI has been weakening recently and is at levels seen in September this year signaling a near oversold level at 33 points. Source: xStation5
Zalando shares (ZAL.DE) H1 interval. The shares of Germany's leading e-commerce retailer are trading up nearly 7% today. The RSI relative strength index approached levels at 90 points signaling the potential overbought level. Source:xStation5
