DAX Holds on Record Course – Fresenius Raises Guidance

Currency Market: Euro Stable Above 1.15

On the currency market, the euro was largely stable. The common currency was trading at 1.1544 US dollars in the late afternoon, putting it 0.1 percent above the previous day's close. Against the Japanese yen, the euro was almost unchanged at 181.94, while it gained 0.1 percent against the Swiss franc to 0.9338. The euro received a small dampener against the British pound, which tended slightly stronger at 0.8566 EUR/GBP.

On the bond and commodity markets, the situation also remained calm. The US dollar eased slightly against the yen to 157.58, while the British pound continued to gain ground at 1.3471 dollars. The Australian dollar was almost unchanged at 0.7045, and Bitcoin fell 0.4 percent to 64,065.21 dollars after having risen during the course of the day to an interim 64,310.87 dollars.

Geopolitics and Commodities: Strait of Hormuz Remains in Focus

Behind the overall positive market environment is also the geopolitical situation: Despite the tensions surrounding Iran and the discussions about the security of the Strait of Hormuz, on whose southern shore Oman lies, investors showed little sign of unsettlement. Supply chains for crude oil did not appear to be acutely threatened in observers' assessment, which additionally supported the already robust sentiment on the equity markets.

On the corporate side, the focus was not only on the blue chips. Smaller mid-cap stocks also benefited from investors' search for growth titles. The raised guidance from Fresenius was read in the market as a signal that the recovery in the healthcare sector could be broader than recently assumed. Analysts pointed out that comparable upgrades to full-year targets could, based on experience, also not be ruled out for other companies in the DAX universe.

Outlook: US Data and Fed in Focus

On the bond market, yields were hardly changed, while gold and silver edged slightly higher. Investors appeared to adjust their positions only marginally ahead of the series of US economic data due on Wednesday. Expectations for the Fed meeting in September as well as the upcoming inflation data from the euro area continued to be cited in the market as the most important short-term drivers.

Over the remainder of the trading day, the development on the US markets is likely to remain the key directional guide. Should the US indices hold on to their gains, observers see good chances that the DAX will continue its record course into the middle of the week. Risks remain, however, the geopolitical tensions in the region around the Strait of Hormuz as well as a possible rise in energy prices, which could weigh on market sentiment.