The fear of persistently high interest rates in the USA is dampening the buying mood of Dax investors.

On Corpus Christi, the leading German index lost 0.1 percent to 18,463 points. Since the beginning of the week, it has fallen by more than one percent. The EuroStoxx50 was up slightly on Thursday. The "higher for longer" interest rate scenario and persistent inflationary pressure were causing concern on the markets, said Ben Laidler from online broker eToro.

In the USA, a turnaround in interest rates is now not expected until the fall due to stubborn inflation. After aggressive increases in some cases, the Fed has kept the key interest rate constant in the range of 5.25 to 5.50 percent for some time now. On Wednesday, the yield on ten-year US government bonds reached a four-week high of 4.6380%. On Thursday it was just below this level. Rising bond yields generally reflect the expectation of higher interest rates, which means more expensive financing and lower profit margins for companies.

INVESTORS SEE ECB ON COURSE TO CUT INTEREST RATES

Investors are now hoping that Friday's PCE index of private consumer spending, which is an important inflation measure for the Fed, will provide new indications of the Fed's approach. Consumer prices for the eurozone are also likely to come into focus at the end of the week. Unlike the Fed, investors firmly expect the European Central Bank to cut interest rates soon. According to a survey, economists believe that the first interest rate cut at the ECB meeting next week is as good as certain. The majority of experts surveyed also expect two further interest rate cuts in September and December.

The dollar and euro struggled to find a direction ahead of the eagerly awaited data. At around midday, the dollar index was slightly down at 104.91 points. The common currency advanced by 0.1 percent to 1.0812 dollars. On the commodity markets, the price of copper in particular fell due to the uncertain US interest rate outlook. The industrial metal, which has gained more than 20 percent this year, fell by 2.8 percent at times to 10,168 dollars per ton. Oil also traded lower. Investors fear that a continued high interest rate policy in the USA could damage the economy and thus also the demand for commodities.

SAP FOLLOWS SALESFORCE INTO THE RED

On the corporate side, SAP moved into focus. Following a disappointing outlook from US rival Salesforce for the second quarter, SAP shares fell by 2.6 percent, making them one of the biggest losers on the DAX. Salesforce shares slipped 16 percent in pre-market US trading.

Only Volkswagen shares were even weaker than SAP in the DAX with a discount of 5.5 percent - although these were traded ex-dividend.

On the Milan stock exchange, the shares of tire manufacturer Pirelli lost ground following the sale of shares by the Chinese Silk Road Fund. The shares fell by 5.8 percent at their peak. Shares in automotive supplier Continental gained a good two percent and, together with Bayer, were among the strongest stocks in the leading German index.

(Report by Daniela Pegna, edited by Thomas Seythal. If you have any questions, please contact our editorial team at frankfurt.newsroom@thomsonreuters.com)