German shares rebounded on Tuesday, with a closing increase of 0.69%. This positive momentum followed reports indicating that the economic team of US President-elect Donald Trump is assessing a gradual increase in tariffs as a measure to control inflation rates. The focus on US inflation data is heightened this week, with analysts predicting a rise in headline inflation to 2.9% for December 2024, up from 2.7%, while core inflation is expected to remain stable at 3.3%.
The importance of these figures is underscored by BofA Research's insights, which suggest that, while they do not foresee significant risks pushing inflation higher, there is a noteworthy concern about the recent strength of the labor market and rising inflation expectations. The firm cautions that progress in reducing inflation may falter this year due to anticipated changes in trade, fiscal, and immigration policies.
A recent survey conducted among fundamental analysts revealed apprehensions regarding the possibility of accelerated inflation this year if tariffs are enforced, particularly affecting goods sectors. On the corporate front, Volkswagen experienced a slight decline in vehicle sales, with over 9 million units sold in 2024, marking a decrease of 2.3% year over year.
The company attributed this downturn to the highly competitive market conditions, especially in China. Despite this, Volkswagen's stock saw a climb of 1.08% at market close. Chief Executive Officer Oliver Blume remarked, "This year, we continue to consistently renew our portfolios and bring another 30 new models on the road for our customers across all brands." Moreover, Infineon Technologies advanced by 1.12%, embarking on the construction of a new backend fabrication facility in Thailand as part of a strategic move to enhance its manufacturing capabilities in Asia amidst rising demand for power modules.
The first phase of this new facility is anticipated to commence operations by early 2026..