DAX ticks lower as investors look for cues

The DAX index has ticked lower in the Monday session. Currently, the DAX is at 12,521, down 0.12% on the day. On the release front, there are no major German or eurozone events. In economic news, the eurozone trade surplus slipped to EUR 16.9 billion, short of the estimate of EUR 17.6 billion. This marked the lowest surplus since January 2017.

European equity markets showed little change last week and the DAX continues to trade quietly on Monday. Still, the trading tensions hovering in the air have many investors wondering if this is the calm before the storm. On Tuesday, the Trump administration said it was considering imposing tariffs on some $200 billion in Chinese goods, which would be a significant escalation in the trade war between the two economic giants. China has promised to respond with “firm and forceful measures”, but hasn’t provided any details. With neither side showing any flexibility, the markets could be heading for stormy waters if China retaliates.

Trade policy is not part of the Federal Reserve’s mandate, but Fed policymakers continue to voice concern about the escalating trade war between the U.S and its major trading partners, particularly China. On Friday, Dallas Fed President Robert Kaplan said he would have to downgrade his outlook if the tariff battle continues. Kaplan said that U.S tariffs on steel and aluminum imports had dampened capital expenditures plans and further trade tensions could lead to currency fluctuations and geopolitical instability.

 

Economic Calendar

Monday (July 16)

  • 5:00 Eurozone Trade Balance. Estimate 17.6B. Actual 16.9B

*All release times are DST

*Key events are in bold

 

DAX, Monday, July 16 at 7:40 DST

Previous Close: 12,540 Open: 12,534 Low: 12,523 High: 12,605 Close: 12,525

DAX steady as investors search for cues

The DAX index is showing limited movement in the Friday session. Currently, the DAX is at 12,510, up 0.14% on the day. On the release front, there are no major German or eurozone events. The German Wholesale Price Index dipped to 0.5% in June, down from 0.8% a month earlier. This edged above the estimate of 0.4%.

European equity markets held their own this week, and the DAX and the CAC indexes have shown little movement over the week. Still, the trading tensions hovering in the air have many investors wondering if this is the calm before the storm. On Tuesday, the Trump administration said it was considering imposing tariffs on some $200 billion in Chinese goods, which would be a significant escalation in the trade war between the two economic giants. China has promised to respond with “firm and forceful measures”, but hasn’t provided any details. With neither side showing any flexibility, the markets could be heading for stormy waters if China retaliates.

At last month’s ECB policy meeting, the markets finally received some clarity with regard to the Bank’s asset-purchase program (QE). ECB President Mario Draghi said that the ECB would taper the purchases from EUR 30 billion to 15 billion in September, and terminate the program completely in December. True to form, Draghi left open the possibility of extending QE if needed. Still, with the eurozone economy generally performing well and inflation up to 1.7%, the markets are optimistic that the ECB will wind up QE on schedule. That means that attention is focusing on the timing of a rate hike. At the June meeting, the ECB said it would keep hold rates at current levels “through the summer” of 2019, but this wording is vague, leaving the precise timing open to debate. Does this phrase mean that that the ECB will wait until the October meeting, or could the ECB raise rates during the summer, if conditions warrant a hike? ECB policymakers will be carefully monitoring growth and inflation data in the eurozone, with strong numbers reinforcing the case to raise interest rates sooner rather than later.

  The sky hasn’t fallen just yet

  First signs of tariffs impact in China’s June trade numbers

Economic Calendar

Friday (July 13)

  • 2:00 German WPI. Estimate 0.4%
  • All Day – ECOFIN Meetings

*All release times are DST

*Key events are in bold

DAX, Friday, July 13 at 6:10 DST

Previous Close: 12,492 Open: 12,539 Low: 12,498 High: 12,584 Close: 12,521

DAX gains ground as German CPI matches estimate

The DAX index has posted considerable gains in the Thursday session, rebounding after losses on Wednesday. Currently, the DAX is at 12,503, up 0.69% on the day. On the release front, German Final CPI slipped to 0.1% in June, down from 0.5% a month earlier. Still, the reading matched the estimate. Eurozone Industrial Production rebounded with a strong gain of 1.3%, edging above the forecast of 1.2%. The ECB released the minutes of its June policy meeting. On Friday, Germany releases the Wholesale Price Index.

Trade tensions between the U.S and its trading partners continue, keeping investors uneasy. Although the equality markets have reacted negatively to the trade tariffs, the overall impact on the markets has been muted. German markets, for example, have posted gains in July. The U.S and China imposed tariffs on each other of some $30 billion, the Trump administration has raised the ante, threatening to hit China with further tariffs on $200 billion worth of Chinese goods. China cannot retaliate in kind, since it does not import that amount of goods from the U.S. Still, the Chinese can take steps, such as making it more difficult for U.S companies to do business in China, or lowering the value of the Chinese yuan.

With the ECB poised to wind up its asset-purchase program in September, attention is now focusing on the timing of a rate hike by the central bank. In June, the ECB said it would keep hold rates at current levels “through the summer” of 2019, but this wording is vague, leaving the precise timing open to debate. Does this phrase mean that that the ECB will wait until the October meeting, or could the ECB raise rates during the summer, if conditions warrant a hike? It would seem unlikely that policymakers will raise rates before the asset-purchase program is terminated, but the ECB has not shut the door on such a scenario. The ECB is forecasting that inflation will reach 1.7% in 2018, which is not far from its target of just below 2 percent. If oil prices were to surge and send inflation higher, there will be more pressure on policymakers to raise interest rates.

  Equities shrug off trade tariff tensions

  US Inflation Eyed as Markets Pare Losses

Economic Calendar

Thursday (July 12)

  • 2:00 German Final CPI. Estimate 0.1%. Actual 0.1%
  • 5:00 Eurozone Industrial Production. Estimate 1.2%. Actual 1.3%
  • All Day – Eurogroup Meetings
  • 7:30 ECB Monetary Policy Meeting Accounts

Friday (July 13)

  • 2:00 German WPI. Estimate 0.4%
  • All Day – ECOFIN Meetings

*All release times are DST

*Key events are in bold

 

DAX, Thursday, July 12 at 7:25 DST

Previous Close: 12,417 Open: 12,471 Low: 12,409 High: 12,494 Close: 12,501

DAX slides as trade tensions spook equity markets

The DAX index has posted sharp losses in the Wednesday session. Currently, the DAX is at 112,457, down 1.21% on the day. On the release front, there are no major German or European events. ECB President Mario Draghi spoke at an event in Frankfurt but did not comment on monetary policy. On Thursday, Germany releases Final CPI and the ECB publishes its minutes from the June policy meeting.

Global markets are seeing red on Wednesday, as investors remain uneasy about the tariff battle being waged between the U.S and its major trading partners, particularly China. After the U.S and China imposed tariffs on each other of some $30 billion, the Trump administration has raised the ante, threatening to hit China with further tariffs on $200 billion worth of Chinese goods. China cannot retaliate in kind, since it does not import that amount of goods from the U.S. Still, the Chinese can take steps which will make it more difficult for U.S companies to do business in China. President Trump’s presence at the NATO summit will not bolster investor confidence, as Trump has lashed out at Germany and other NATO members for not paying their fair share in defense spending.

The eurozone could be headed into headwinds in the second half of 2018, according to the well-respected ZEW Economic Sentiment indicators. The German and eurozone releases both dropped to their lowest levels since August 2012. The surveys indicate the views of financial experts, who are clearly concerned about the economic outlook for the next six months. Internal divisions over migration and fears over a full-blown global trade war have investors worried that the eurozone outlook could worsen, which would likely send European equity markets to lower ground.

  Investors turn risk-averse on tariff war escalation

  ( Update 1) When the going gets tough, the tough get going

Economic Calendar

Wednesday (July 11)

  • 3:00 ECB President Mario Draghi Speaks
  • Tentative – German 10-year Bond Auction. Actual 0.36/1.6

Thursday (July 12)

  • 2:00 German Final CPI. Estimate 0.1%
  • 5:00 Eurozone Industrial Production. Estimate 1.2%
  • All Day – Eurogroup Meetings
  • 7:30 ECB Monetary Policy Meeting Accounts

*All release times are DST

*Key events are in bold

 

DAX, Wednesday, July 11 at 7:05 DST

Previous Close: 12,609 Open: 12,504 Low: 12,428 High: 12,515 Close: 12,457

DAX starts week quietly as German trade surplus matches forecast

The DAX index has ticked upwards in the Monday session. Currently, the DAX is at 12,455, up 0.11% on the day. On the release front, Germany’s trade surplus widened to EUR 20.3 billion, matching the estimate. Eurozone Sentix Investor Confidence dropped to 12.1, but this beat the forecast of 9.0 points. ECB President Mario Draghi is testifying at the European Parliament Economic and Monetary Affairs Committee. On Tuesday, Germany and Eurozone ZEW Economic Sentiment are expected to post sharp declines.

German industrial numbers looked sharp last week. On Thursday, Factory Orders jumped 2.6%, marking a five-month high. This was followed by Industrial Production on Friday, which climbed 2.6%, its sharpest gain in 2018. There is growing concern that protectionist moves by both the U.S and the EU could take a toll on exports and the manufacturing sectors, so these strong readings are welcome news. Meanwhile, trade tensions between China and the U.S remain high as U.S tariffs on $34 billion in Chinese products took effect on Friday and China has vowed to retaliate against U.S imports. European officials are anxiously watching these developments, as Trump has threatened to impose tariffs of 20 percent on European auto imports if the EU does not remove their tariffs on U.S automobiles. The EU would clearly prefer not to engage in a full-blown tariff war with the United States and on Thursday, there was a report that European officials are examining the possibility of a tariff-cutting agreement between the world’s largest car exporters. Such a deal would be a major accomplishment and would likely boost European stock markets.

U.S employment data was a mix on Friday, as job growth remained above the 200-thousand level, but wage growth faltered. Nonfarm payrolls dropped to 213 thousand, but this beat the estimate of 195 thousand. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S and China.

  The trade war is finally upon us

  Wait-and-see as tariffs and payrolls loom

Economic Calendar

Monday (July 9)

  • 2:00 German Trade Balance. Estimate 20.3B. Actual 20.3B
  • 4:30 Eurozone Sentix Investor Confidence. Estimate 9.0. Actual 12.1
  • 9:00 ECB President Draghi Speaks
  • 11:00 ECB President Draghi Speaks

Tuesday (July 10)

  • 5:00 German ZEW Economic Sentiment. Estimate -17.9
  • 5:00 Eurozone ZEW Economic Sentiment. Estimate -13.2

*All release times are DST

*Key events are in bold

DAX, Monday, July 9 at 7:10 DST

Previous Close: 12,496 Open: 12,546 Low: 12,504 High: 12,558 Close: 12,510

DAX Under Pressure, Investors Eye Fed Minutes

The DAX index has posted losses in the Wednesday session. Currently, the index is trading at 12,428.50 down 0.48% since the Tuesday close. On the release front, German and Eurozone Manufacturing PMIs slowed in January. The German PMI dipped to 60.3, shy of the estimate of 60.6 points. It was a similar story with the Eurozone PMI, which dropped to 58.5, shy of the estimate of 59.2 points. In the US, the key event is the Federal Reserve minutes from the January meeting.

It continues to be a blue February for the DAX, which has declined 6.2% so far this month. The correction on the US stock markets has sent European markets lower, although the DAX managed to gain ground last week, as European corporate earnings were generally strong. Will the stock market volatility resume? The markets are keeping a close eye on the Fed minutes, which could provide a hint of future rate policy. . Recent US numbers have been strong, and inflation indicators have been pointing upwards. This has raised concerns that the Fed may accelerate its pace of hikes, which triggered a sharp correction in global stock markets. The new chair of the Fed, Jerome Powell has tried to reassure the markets that the Fed is monitoring the situation, but it’s doubtful that the Fed can do much to prevent volatility in the markets.

It’s been a wild, wild ride for Bitcoin, the most popular virtual currency. Bitcoin has fluctuated between $900 and $19,000 over the past years. These wild swings have drawn the attention of policymakers and lawmakers, as there are growing concerns that virtual currencies could have a negative economic impact. France and Germany want to put virtual currencies on the agenda at the next G-20 meeting, and there is bipartisan support in Congress to adopt new rules to regulate virtual currencies. However, Draghi poured cold water on any ECB involvement, saying that it was not the ECB’s responsibility to ban or regulate Bitcoin. Draghi added that the ECB was exploring the use of blockchain, a digital technology to monitor bitcoin transactions.

Economic Calendar

Wednesday (February 21)

  • 3:30 German Flash Manufacturing PMI. Estimate 60.6
  • 4:00 German Flash Services PMI. Estimate 56.9
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 59.2
  • 4:00 Eurozone Flash Services PMI. Estimate 57.7
  • 14:00 US FOMC Meeting Minutes

*All release times are EST

*Key events are in bold

 

DAX, Wednesday, February 21 at 8:50 EDT

Open: 12,451.96 High: 12,512.00 Low: 12,426.50 Close: 12,428.50

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

DAX Under Pressure Despite Strong German Releases

The DAX index has posted slight losses in the Tuesday session. Currently, the index is trading at 12,362.98, down 0.19% since the Monday close. On the release front, German and eurozone confidence reports for February beat the estimates, but slowed compared to the January releases. German ZEW Economic Sentiment came in at 17.8, beating the estimate of 16.0 points. Eurozone ZEW Economic Sentiment dropped to 29.3, above the estimate of 28.4. German PPI improved to 0.5%, above the estimate of 0.3%. This marked the strongest reading since January 2017. On Wednesday, Germany and the eurozone release manufacturing PMIs. In the US, the Federal Reserve will release the minutes of its January meeting.

The recent turbulence in global stock markets have sent the DAX lower, and the index has shed 5.9% in February. However, the index rebounded last week, posting a winning week for the first time since mid-January. The catalyst for the gains were positive corporate earnings in Europe. The US recently passed massive corporate and individual tax reform, worth $1.5 trillion. This could significantly boost earnings in Q1 of 2018 for European companies which have major operations in the US, such as banking giants Deutsche Bank and Commerzbank, which are listed on the DAX.

The recent turbulence in the global stock markets has triggered strong volatility in the currency markets, and ECB President Mario Draghi recently stated that the ECB was concerned about the euro’s sharp fluctuations. Last week, Draghi weighed in on Bitcoin, a cryptocurrency which has seen wild fluctuations in recent months. There are growing calls for regulation of these currencies, and central banks could play a key role in such regulation. However, Draghi poured cold water on any ECB involvement, saying that it was not the ECB’s responsibility to ban or regulate Bitcoin. Draghi added that the ECB was exploring the use of blockchain, a digital technology to monitor bitcoin transactions.  France and Germany want to cryptocurrencies on the agenda at the next G-20 meeting, and there is bipartisan support in Congress to adopt new rules to regulate virtual currencies.

Economic Calendar

Tuesday (February 20)

  • 2:00 German PPI. Estimate 0.3%. Actual 0.5%
  • 5:00 German ZEW Economic Sentiment. Estimate 16.0. Actual 17.8
  • 5:00 Eurozone ZEW Economic Sentiment. Estimate 28.4. Actual 29.3
  • All Day – ECOFIN Meetings
  • 10:00 Eurozone Consumer Confidence. Estimate 1

Wednesday (February 21)

  • 3:30 German Flash Manufacturing PMI. Estimate 60.6
  • 4:00 German Flash Services PMI. Estimate 56.9
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 59.2
  • 4:00 Eurozone Flash Services PMI. Estimate 57.7
  • 14:00 US FOMC Meeting Minutes

*All release times are EST

*Key events are in bold

DAX, Tuesday, February 20 at 6:30 EDT

Open: 12,451.96 High: 12,512.00 Low: 12,426.50 Close: 12,362.98

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

DAX Gains Ground as Dollar Under Pressure

The DAX index has posted considerable gains in the Friday session. Currently, the index is trading at 12,418.30, up 0.58% since the Wednesday close. On the release front, the sole release was the German Wholesale Price Index, which rebounded with a strong gain of 0.9%, crushing the estimate of 0.2%.

It’s been a dismal February for the DAX, which has shed 6.1%. However, the index has steadied, and appears headed towards its first winning week since January. The catalyst for the turnaround after the recent sell-off is strong corporate earnings in Europe. European stock markets have taken their cue from US markets, which have posted gains this week at the expense of the weaker US dollar.

The recent stock market turbulence has triggered volatility in the currency markets, and this is causing concern at the ECB. Last week, ECB President Mario Draghi said that he is more confident that eurozone inflation is moving closer to the Bank’s target of just below 2 percent, due to improving economic growth. However, Draghi listed currency market volatility as an obstacle to the inflation target, and added that the ECB would carefully monitor the euro’s exchange rates. The ECB tapered its massive stimulus program from EUR 60 billion to 30 billion/mth in January, and the markets are on the lookout for hints as to whether the ECB will normalize policy and wind up stimulus in September.

Economic Calendar

Friday (February 16)

  • 2:00 German WPI. Estimate 0.2%. Actual 0.9%

*All release times are EST

*Key events are in bold

 

DAX, Friday, February 16 at 6:10 EDT

Open: 12,408.29 High: 12,483.50 Low: 12,368.00 Close: 12,418.30

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

DAX Climbs as Investors Ignore Spike in US Consumer Inflation

The DAX index has posted strong gains in the Thursday session. Currently, the index is trading at 12,453.00, up 0.92% since the Wednesday close. In the eurozone, trade surplus continues to grow, climbing to EUR 23.8 billion. This beat the forecast of EUR 22.4 billion. On Friday, Germany releases the Wholesale Price Index, which is expected to rebound with a gain of 0.2%.

European stock markets are higher on Thursday, as company earnings from major European corporations have been strong. The bank sector has posted strong gains, and this is reflected in bank shares on the DAX – Commerzbank is up 2.39%, and Deutsche Bank is close behind at 2.04%. It has been a blue February for the DAX, which has slipped 5.9%, as global stock markets endured a sharp correction last week. This week has seen some improvement, and US markets were up on Wednesday, despite soft retail sales as well as higher inflation. The recent sell-off was triggered by concern that stronger inflation would lead to an acceleration in rate hikes. So far, the stronger CPI numbers out of the US have not spooked investors.

The recent stock market turbulence has triggered volatility in the currency markets, and this is causing concern at the ECB. Last week, ECB President Mario Draghi said that he is more confident that eurozone inflation is moving closer to the Bank’s target of just below 2 percent, due to improving economic growth. However, Draghi listed currency market volatility as an obstacle to the inflation target, and added that the ECB would carefully monitor the euro’s exchange rates. The ECB tapered its massive stimulus program from EUR 60 billion to 30 billion/mth in January, and the markets are on the lookout for hints as to whether the ECB will normalize policy and wind up stimulus in September.

Economic Calendar

Thursday (February 15)

  • 5:00 Eurozone Trade Balance. Estimate 22.4B. Actual 23.8B

Friday (February 16)

  • 2:00 German WPI. Estimate 0.2%

*All release times are EST

*Key events are in bold

DAX, Thursday, February 15 at 6:00 EDT

Open: 12,446.00 High: 12,480.28 Low: 12,400.69 Close: 12,453.00

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.