At the start of the session, the DAX fell 0.2 percent to 15,528.81 points. Ultimately, the stock market barometer recovered with a tailwind from New York and was 0.46 percent higher at 15,631.87 points.
On Tuesday morning, the DAX reached 15,706 points, another high since February of the previous year, but was unable to maintain this level.
Powell’s speech as a stress test the day before
US Federal Reserve Chairman Jerome Powell hit the stock markets on Tuesday with the prospect of further interest rate hikes. On Wednesday he will answer questions from a House of Representatives committee.
Higher key interest rates in prospect
In February, the Fed further slowed the pace of rate hikes, raising interest rates by just 0.25 percentage points, down from half a percentage point in December and four consecutive 0.75 percentage point hikes before that. According to Credit Suisse, a longer period of higher interest rates (“higher-for-longer”) is now emerging.
Economic data: German industrial production above expectations
Investors were also waiting for the German production data for January. Production in Germany’s manufacturing sector developed much better than expected in January, which was mainly due to a strong recovery in construction output. As reported by the Federal Statistical Office (Destatis), production increased overall by 3.5 percent compared to the previous month. Economists polled by Dow Jones Newswires had expected an increase of just 1.5 percent. In a year-on-year comparison, production fell by 1.6 (December: minus 3.3) percent.
US jobs data
In addition, job data from the private agency ADP was in the diary, which should give a foretaste of the official report on Friday. Ex agricultural, 242,000 new jobs were created in February, while 200,000 new jobs had been expected after 119,000 in the previous month.
The Fed’s Beige Book economic report is also expected in the evening.
Editorial office finanzen.net / Reuters / dpa-AFX / Dow Jones Newswires
Image sources: Julian Mezger for Finanz Verlag