Dax with the largest daily loss in three and a half months

In the opinion of Ralf Schweden from the Landesbank Helaba, the “US central bank should feel confirmed that it will raise the key interest rate by 50 basis points next week and will continue to take aggressive action against inflation in July”.

The move lifted the dollar index, which tracks the rate against major currencies, by as much as 0.9 percent on Friday to a three-and-a-half-week high of 104.25 points.

>> Read also: Inflation in the US rises to 8.6 percent in May – Fed Chair Powell under pressure

Before the publication, expert Jeffrey Halley from broker Oanda had expected a flight from risk across all asset classes – with the exception of the dollar – at such high values.

Markets anticipate rapid and significant rate hikes

Bonds were also sold off with a slight lag after the US inflation data. In return, yields increased significantly. A 10-year Treasury bond was trading at 3.047 percent before the release and has since climbed to 3.146 percent.

Yesterday, Thursday, the European Central Bank further fueled the sell-off on the bond market with its interest rate decision. The yields on federal bonds with a term of two and five years were 0.948 percent and 1.2307 percent on Friday, the highest since 2011. But then the key interest rate of the ECB was 1.5 percent.

For the capital market expert Thomas Altmann, this increase shows “what rapid and significant interest rate increases the markets are expecting”. The yield on the ten-year federal loan was also at a new eight-year high at 1.49 percent.

In addition, the yields on Italian and German government bonds drifted apart again. Compared to the 1.49 percent for a German bond, this figure was 3.84 for the Italian counterpart – a difference of 235 basis points. Before the ECB decision yesterday, Thursday, the difference was around 200 points. This increase shows that fears of a return to the euro debt crisis are back.

>> Read also: Turnaround in interest rates: Can the southern countries cope with higher interest rates at all?

Real estate and industrial stocks fell significantly on today’s trading day. Vonovia papers lost 3.1 percent, Tag Immobilien even 6.7 percent. In industrial stocks, Heidelberger Druck led the list of losers with a minus of 5.7 percent.

Most of the other “old economy” values, i.e. securities from traditional industries, have also lost more than the market as a whole. Financial stocks also fell sharply due to the threat of an impending recession due to drastic interest rate hikes.

Look at individual values

Bayer: The group has won another lawsuit in the USA about alleged cancer risks from the weed killer glyphosate. The jury of a court in Kansas City, Missouri ruled in favor of the DAX company on Thursday and ruled that the herbicide was not to blame for plaintiff Allan Shelton’s illness. The stock fell about 3 percent.

Bayer took on major legal risks in 2018 with the $60 billion purchase of US seed giant Monsanto, which produces the controversial weed killer Roundup containing glyphosate. The agrochemical and pharmaceutical company has now prevailed in three glyphosate processes in a row in the USA, but previously also lost three processes in a row. The Leverkusen team is faced with numerous other similar US lawsuits.

GFT Technologies: The shares lost around eight percent. The private bank Berenberg had previously lowered its investment rating for the IT service provider from “buy” to “hold” for valuation reasons and sees little further scope for price increases.

Dividends: The following papers were traded today, Friday, with a dividend discount. Brenntag (70.68 euros closing price Thursday, 1.45 euros dividend), DWS Group 31.24 euros, 2.00 euros), Instone Real Estate (13.06 euros, 0.62 euros), Traton (16.96 euros , 0.50 euros)

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