FRANKFURT (dpa-AFX) - Ahead of the last full trading week of a strong stock market year, many are already looking ahead to 2025. However, further price swings are possible on the financial markets and 2024 is not yet over, writes foreign exchange strategist Christian Apelt from Landesbank Helaba.

The record-holding German leading index, the Dax, is currently up over 20 percent for the year. Despite concerns about the domestic economy and the early parliamentary elections in February, only a few indices can boast even more significant gains - such as the broad-based US S&P 500 index and the technology-heavy Nasdaq 100 index. "The brilliant year-end rally gives rise to fears that the markets have overshot the mark," says analyst Uwe Streich from Landesbank Baden-Württemberg (LBBW). He notes a clear discrepancy between the strong price and weak earnings performance of the DAX.

The focus on the trading days before Christmas will be on the interest rate decisions of several major central banks. Apelt assumes that the US Fed will cut its key interest rate by a further 0.25 percentage points on Wednesday evening. Only a small minority on the markets expect the current interest rate of 4.50 to 4.75 percent to be maintained, as the "Fed-Watch Tool" of the futures exchange CME shows. A rate cut of 0.5 percentage points is therefore practically ruled out. According to Apelt, more exciting than the interest rate decision are the projections of the US monetary authorities for the further interest rate development and statements on the future course.

The next monetary policy decisions by the British central bank and the Bank of Japan are also on the agenda on Thursday. Last week, the European Central Bank (ECB) cut its key interest rate by 0.25 percentage points as generally expected. In contrast, the Swiss central bank made a surprisingly significant cut of 50 basis points.

In addition to monetary policy, the days leading up to Christmas also held important economic data in store, according to the weekly outlook from private bank Merck Finck. Its chief strategist Robert Greil refers in particular to the preliminary December purchasing managers' indices from China, Europe and the USA on Monday. In Germany, his focus is on the Ifo business climate and the ZEW economic expectations on Tuesday and the GfK consumer climate on Thursday. The upcoming inflation data from the EU and the UK (both Wednesday), the USA (Thursday and Friday) and Germany (Friday) will have a major impact on monetary policy and therefore also on the markets.

Some corporate news could also cause price movements. On Tuesday, hydrogen group Thyssenkrupp Nucera will present its figures for the past financial year, followed the next day by electronics retailer Ceconomy - although these are only final figures. On Thursday, perfumery chain Douglas will report on its business performance for 2023/24, while the quarterly reports from logistics group Fedex and sporting goods manufacturer Nike, which are expected late in the evening, could provide impetus for their German competitors DHL, Adidas and Puma respectively. The DIY store holding company Hornbach will present its interim report on Friday.

Also before the weekend is the big expiry day on the futures markets. This is when futures contracts on shares and indices expire. The term "major expiry" or "quadruple expiry" is used by brokers when options and futures on indices and individual shares expire on the same day. There are a total of four major expiry dates each year - on the third Friday of March, June, September and December. On these dates, share prices and indices can fluctuate noticeably without any significant news./gl/jsl/nas

-- By Gerold Lohle, dpa-AFX