DAX Lingers Just Below Record High – Focus on US Jobs Report

The background to the nervousness is the persistent inflation risks in the US as well as the recently mixed economic signals. Should job growth come in stronger than expected, market observers said, the chances of another rate hike would increase, which could put pressure on equity markets. Conversely, weaker data could bolster hopes of a pause from the Federal Reserve.

US Jobs Report as Market Driver

In DAX trading, the heavyweights Munich Re, Allianz, Volkswagen, and Daimler Truck also drew investors' attention. While shares of Munich Re and Allianz remained in demand, the stocks of automakers Volkswagen and Daimler Truck were weaker amid the recently clouded industry sentiment.

DAX Heavyweights in Focus

Beyond the economic data, a geopolitical signal in the Persian Gulf provided talking points. According to a Wall Street Journal report, Iran and Oman are close to an agreement on establishing two shipping routes that would allow passage through the strait in both directions.

Iran and Oman Near Shipping Agreement

If the agreement is actually concluded, it could ease the tense security situation in the region and stabilize routes for global oil and goods traffic. The Strait of Hormuz is considered one of the world's most important sea lanes; smooth passage has a direct impact on energy prices and the global economy.

At the same time, political risks surrounding Iran and the US remain a burdening factor. Reports of the US government's actions under Donald Trump in the region have repeatedly caused uncertainty in markets recently. Investors are therefore weighing the chances of a diplomatic solution against the risk of further tensions.

Asia and Other Markets

Asian stock exchanges were mostly stable to slightly positive in the morning, supported by hopes of de-escalation in the Middle East. The positive impulse from Asia, however, only hesitantly carried over to German trading, where participants apparently wanted to wait for the US data first.

In the bond market, yields on German government bonds remained close to their previous day's levels. The euro was largely unchanged against the US dollar. The gold price, which had recently been in demand as a safe haven, also showed no clear direction.

Market participants expected the wait-and-see stance to continue until the release of the US data in the afternoon. Larger price movements are only expected once the economic figures provide clear signals – or when new news from the Middle East changes investors' risk assessment.