The Dax with a massive increase yesterday, as well as the US indices: do you believe in this rally – or is that the music on the Titanic, which continued to play when the ship had long since rammed the iceberg? The best of all worlds is currently priced into the Dax and other indices: an imminent end to the Ukraine war (unlikely), an early reduction in interest rates by the Fed after a short phase of hikes (also unlikely), the avoidance of a recession (also unlikely). But what if just one of these assumptions fails? Like the US indices, the Dax is massively overbought and technically at its limit, so a correction today shouldn’t really come as a surprise. The litmus test for this rally is yet to come: if Putin gets serious about paying in rubles for gas, that will effectively mean a stop in Russian gas supplies – and that would be a catastrophe for the German economy, which will not ignore the Dax.
Note from video: “Consumers see purchasing power melting away” – focus on energy prices
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