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German Shares Slide Ahead of Anticipated US Sanctions on Iran

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German equities kicked off a new trading week on a downbeat note, with the blue-chip DAX index closing Monday's session 0.11% lower, as the market awaits details on fresh US sanctions against Iran and its trade partners.

Ahead of a scheduled Monday press conference, US Treasury Secretary Scott Bessent described the new measures as an "Economic D-Day" against Iran, which has conversely threatened to block all Gulf oil flows in retaliation. Meanwhile, Reuters reported that Pakistan's army chief Asim Munir arrived in Tehran for talks, with a source telling the news outlet that Munir is expected to meet with key figures close to Iran's supreme leader.

Amid a quiet day for economic news, investors are anticipating key updates for the week, including Germany's final gross domestic product print for the second quarter and the ifo business climate survey for August on Tuesday, the GfK September consumer confidence report on Thursday, and the eurozone economic sentiment and consumer confidence data on Friday. Across the pond, marketwatchers are expected to focus on US Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium.

"Investors will be weighing Chairman Warsh's speech at Jackson Hole (8/28/2026) as a litmus test for the new Fed. Our base case is that Warsh signals inflation progress and a continued pause, despite core inflation remaining above target. We view 3% core inflation as the new 2%, supported by sticky 'supercore' (core services ex-housing), and AI-capex and war disruptions sustaining goods inflation," research firm Stifel wrote.

On the corporate front, Bayer (BAYN.F) secured the Japanese Ministry of Health, Labour, and Welfare's approval for Hyrnuo, or sevabertinib, marking the country's first targeted therapy cleared for HER2 mutation-positive unresectable advanced or recurrent non-small cell lung cancer across all treatment lines, including first-line use. The German life science company gained 0.92% at closing.

Infineon Technologies (IFX.F) agreed to buy India-based digital power management company C2i Semiconductors. The deal is expected to close in the third quarter. The German semiconductor manufacturer was 3.23% in the red.

Meanwhile, Metzler Capital Markets boosted its price target and earnings estimates for Deutsche Post (DHL.F), d/b/a DHL Group, as the research firm expects the German logistics group to again raise its full-year 2026 EBIT target beyond the current 6.5 billion-euro goal.

"We expect positive earnings effects from the situation in the Middle East - including shortages and temporary price increases - to amount to approximately EUR 250 million (e) for DHL in fiscal year 2026. We expect that the likely [non-recurrence] of these effects next year will be more than offset by a) a postage rate increase in P&P, b) continued structural growth in Supply Chain, c) a rebound in the freight business under the new management (DGF has fallen somewhat behind in recent years), and d) continued positive volume effects in Express," Metzler said. DHL rose 0.93% at the end of the session.

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