This week may become very volatile since the US, Germany and the UK are releasing their inflation reports. Then, the Fed, ECB, National bank of Switzerland and the Bank of England are releasing their key rate vote results.

Pay attention to the US inflation slow down in the month to month ratio. If it confirms to reduce to 0.3%, this would increase the probability that the Fed would go easy on the monetary policy. This is a good signal for the stocks market, since in this case there would be more enthusiasm for the riskier currencies. But let’s not forget the German data. An unexpectedly high inflation in the largest economy of the block may apply serious pressure on the market.

Last week leaders and outsiders

DAX:

Top: Merck KGaA +2.77%, Mercedes Benz Group AG +2.65%, Siemens Energy AG +2.57%

Flop: Beiersdorf Aktiengesellschaft -0.8%, Fresenius SE & Co. KGaA -0.74%, Sartorius AG Vz -0.74%

EURO STOXX 50:

Top: CRH plc +0.96%, Schneider Electric S.A. +0.89%, Enel S.p.A. +0.75%

Flop: PROSUS NV EO -2.32%, Deutsche Börse AG -1.8%, L'Oréal S.A. -1.49%

Looking at the price charts of the DAX and EURO STOXX 50, we wouldn’t see much difference. Their quotes remain in considerably broad sides, suggesting the uncertainty. With that, if we analyze the leaders and the outsiders within these indices, the difference becomes more obvious. In case of the DAX, none of the securities ended the week with more than 0.8% loss, while the best security has gained almost 3%. At the same time the EURO STOXX 50 tells a different story. None of the securities managed to end the week in profit of 1% and above, while the outsider has lost 2.3%.

Bond market:

The 10-year yields in Germany and France remain little above the minimum values since the end of September. With that only the disappointing Germany inflation data may boost the 10-year yields. In that case the ECB would have to increase the key rate attempting to fight the inflation.

The oil market

While waiting for the inflation data from the US and for the Fed decision regarding the key rate, the oil is being traded in a broad side. Brent remains at 476.5, while WTI is below $72 per barrel.

Further inflation reduction in the US would increase the probability the Fed monetary policy would soften, thus supporting the oil quotes. It is also important to follow up on the China’s quarantine restrictions and the OPEC+ commentaries. The WTI returning below $70 per barrel may lead to another OPEC+ attempt to restrain the market from a more powerful reduction by announcing yet another cut in oil extraction.