The US made their inflation report per December, 2022. For the first time since June, 2022, the inflation turned out to be negative, and moreover, the yearly value lowered to 6.5%, it is the minimum for the last 14 months.

Even though this report considerably increases the chances for the key rate to be lowered, the reaction was moderate. Key fund indices did not manage to continue growing. Consequently, we do not observe any considerable volatility in the European stocks trades.

Last week leaders and outsiders:
DAX:

Top: Bayer AG +1.77%, Siemens Healthineers AG +1.28%, Deutsche Börse AG +1.02%

Flop: Volkswagen AG Vz -2.58%, Mercedes Benz Group AG -2.05%, BMW AG St -1.44%

EURO STOXX 50:

Top: Bayer AG +1.95%, Total S.A. +1.52%, ING Group N.V. +1.51%

Flop: Volkswagen AG Vz -2.18%, Mercedes Benz Group AG -2.74%, BMW AG St -1.98%

Even though the DAX and EURO STOXX 50 showed moderate growth, the so called outsiders demonstrate yet bigger losses in comparison with the leaders. Nevertheless, the overall mood is bullish with more enthusiasm towards riskier assets on the background. This is also confirmed by a smooth decline in the 10-year yields profitability in most of the European countries.

Bond market:

Germany’s 10-year yields profitability approaches 2% having lost 0,4%. The situation in France and Spain is very similar, which is also a good sign for the stocks market. The bullish scenario shall remain predominant unless there be considerable changes in the economy of these countries.

Oil market

China is increasing the volumes of the oil consumption while softening the quarantine restrictions. Moreover, the experts specializing on China predict the increase in the physical demand of the oil reaching the historical maximum. This is a bullish fundamental factor supporting the oil quotes. However, one should not count on the oil quotes returning to their 2022 maximum values.

Consistent growth of demand in China can be compensated by the OPEC increasing the extraction volumes and by buying it from Russia with a nice discount. Considering the above, there’s a chance of further oil quotes consolidation, WTI – from 71 to 84 dollars per barrel, Brent – 76 to 89.

That’s why it is important to follow up on the OPEC+ comments, especially regarding the changes in the extraction volumes. Another bullish factor is the growth of the key indices in the US and Europe. In this case the world economy regeneration would be confirmed, which is a  favorable signal for the oil market.