The economy is getting back on track after the holidays
After a week shortened by holidays, the financial markets returned to normal rhythm this Monday. The publication of regional and national data oninflation in Germany will be the center of attention. Furthermore, the American economic agenda will highlight December factory orders, a key indicator for assessing industrial activity. Investors will also keep a close eye on statements from central bank officials.
A strengthened dollar after the holidays
The American dollar (USD) gained ground against its main counterparties after the end-of-year break. The dollar index, which measures its performance against a basket of currencies, rose almost 1% over the previous week. This Monday morning, it remains stable below the 109.00 mark, while 10-year US Treasury bond yields remain above 4.6%. U.S. stock index futures point to a mixed open after a positive close on Friday.
Weekly performance of the dollar
Over the past seven days, the USD has posted notable gains against theeuro and to the livre sterlingbut backed down slightly in the face of Japanese yen and at Swiss franc. These fluctuations reflect a combination of economic data and investor positions at the start of the year.
| Devise | Variation (%) contre USD |
|---|---|
| EUR | -1.07 % |
| GBP | -1.07 % |
| JPY | +0.13 % |
| CHF | -0.86 % |
European markets: focus on Germany
German inflation under the microscope
The first inflation figures for 2025 in Germany will be crucial for assessing the economic dynamics of the euro zone. In December, the annual consumer price index (CPI) is expected at 2.4%, compared to 2.2% in November. This progression could influence the monetary policy expectations of the European Central Bank (ECB).
The euro-dollar exchange rate
The pair EUR/USD remains under pressure after significant losses at the start of the year. After a technical rebound on Friday, the euro stabilizes slightly above 1.0300 this morning. Data on investor confidence in the euro zone, via the Sentix index, will complete the day’s economic analysis.
Bank of Japan and Asian markets
The Bank of Japan (BoJ) continues to monitor developments in economic conditions. Governor Kazuo Ueda reiterated that any adjustment to monetary policies will depend on several factors, including prices and financial stability. Despite slight losses on Friday, the USD/JPY remains above 157.50 in the Asian session.
Commodities: gold and German Bunds
Gold, often prized in a context of economic uncertainties, rose by almost 2% during the first sessions of 2025. This Monday, it fell slightly and is trading around $2,630 per ounce. On the bond side, the yields of German Bundsa key benchmark for European investors, continue to reflect the market’s caution regarding the economic outlook.
Frequently asked questions about the German economy
What is the impact of the German economy on the euro?
As the largest economy in the Eurozone, Germany has a decisive influence on the stability and value of theeuro. Solid growth or controlled inflation strengthens the single currency, while an economic slowdown weighs on its performance.
What is the Bundesbank?
The Bundesbank is the German central bank. Renowned for its rigor, it plays a key role in the monetary policy of the euro zone and inspired the creation of the ECB. Its main objective is to maintain price stability while ensuring the fluidity of payment systems.
What are German Bunds?
Bunds are government bonds issued by Germany. Considered a safe investment, they serve as a benchmark for evaluating other European bonds. In times of crisis, their value increases, reflecting their role as a safe haven.
