DAX Shrugs Off Sharp German, Eurozone Mfg. Data

The DAX Index has ticked lower in the Friday session, but remains above the symbolic 12,000 level. Currently, the DAX is at trading at 12,031.75. On the release front, Germany the Eurozone posted impressive PMI numbers. In Germany, Flash Manufacturing PMI jumped to 58.3, above the forecast of 56.6 points. Eurozone Flash Manufacturing PMI improved to 56.2, above the estimate of 55.3. Both indicators hit their highest levels since 2011. There was further good news, as Services PMIs in Germany and Europe also pointed to stronger expansion.

The economic outlook appears brighter in the eurozone, as the economy has improved in recent months. The German economy, the largest in Europe, remains in solid shape and is expected to expand 1.5% in 2017. However, consumer confidence has not followed suit. GfK German Consumer Climate lost ground for a second straight month, as the GfK indicator fell to 9.8 in March, its lowest level since November 2016. Eurozone Consumer Confidence remains weak, as the indicator posted a decline of -5 in March, almost unchanged. These soft numbers are largely a result of higher inflation, as consumers are concerned about their reduced purchasing power.

It promises to be busy Friday on Capitol Hill, with the focus on health care legislation. President Trump, who campaigned on a promise to repeal the Affordable Care Act (“Obamacare”), wants the House of Representatives to vote on Friday on a bill which repeals and replaces part of Obamacare. A vote on Thursday was shelved, as there was not enough support to pass the bill. The proposed health bill has become a litmus test for the Trump administration, as a failure to pass the bill would indicate that Trump may not be able to push through Congress his pledges to lower taxes and increase fiscal stimulus. The dollar has sustained broad losses in the past week, in part over market frustration over the lack of any details regarding economic policy from Trump. If the President cannot make good on his assault on Obamacare, the dollar could continue to lose ground.

Economic Calendar

Friday (March 24)

  • 4:00 French Flash Manufacturing PMI. Estimate 52.4. Actual 53.4
  • 4:00 French Flash Services PMI. Estimate 56.2. Actual 58.5
  • 4:30 German Flash Manufacturing PMI. Estimate 56.6. Actual 58.3
  • 4:30 German Flash Services PMI. Estimate 54.5. Actual 55.6
  • 5:00 Eurozone Flash Manufacturing PMI. Estimate 55.3. Actual 56.2
  • 5:00 Eurozone Flash Services PMI. Estimate 55.4. Actual 56.5

*All release times are EST

*Key events are in bold

DAX for Friday, March 24, 2017

DAX, March 24 at 6:00 EST

Open: 12,041.25 High: 12,051.75 Low: 12,019.50 Close: 12,031.75

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.