DAX dips following record high

The German equity benchmark is slightly lower this morning after hitting a record high yesterday, as investors lock in profits.

The Germany 30 is trading at 9717, down 0.05% from the record high of 9748 yesterday. The market has held up relatively well.

Last night the US released the beige book, which indicated that the US economy is gaining momentum. This helped the S&P 500 close at a record high last night.

This morning the European Central Bank (ECB) stated that it is content with a 6% capital requirement level for banks operating in the eurozone, which compares with the European Banking Authority level of 5%. When financial institutions are required to hold additional cash reserves it restricts their business activity but increases confidence in the sector, which is important in the long run.

The rate of inflation in the eurozone increased by 0.3% in December, compared with a decline of 0.1% in November. On an annual basis the rate of inflation is 0.8%; this is well below the ECB target of 2%, leaving the door open for loosening of the monetary policy.

At 1.30pm (London time), the US will release the weekly jobless claims report. The consensus is for a reading of 327,000 – if the report comes in below this we could see the DAX head towards 9748.

Germany 30 chart

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