DAX Shrugs Off Strong German Trade Surplus

The DAX has ticked lower in the Tuesday session. Currently, the index is at 12,965.50, down 0.06% on the day. On the release front, Germany’s trade surplus climbed to EUR 21.6 billion, above the forecast of EUR 19.8 billion.

The robust Germany economy continues to hum in the third quarter. There was positive news on Tuesday, as the trade surplus hit a 12-month high. Manufacturing numbers have impressed, as Industrial Production surged 2.7%, the second-highest gain in 2017. Last week, Factory Orders gained 3.6%, its best performance since December 2016. Strong global demand for German goods, in particular automobiles, has been a boon for German industrial and manufacturing output. September PMIs were also solid, as the services and manufacturing sectors continue to show expansion. It could be smooth sailing for the robust Germany economy, with projections that the economy will expand 1.9% in 2017 and 2.0% in 2018. On Wednesday, the German government will release its forecast for GDP growth, as well as employment and inflation forecasts.

The Catalan constitutional crisis has shaken up Spain, and it remains unclear whether Catalan President Carles Puigdemont will unilaterally declare independence from Spain. Catalonians voted in favor of independence, but the national government has refused to negotiate with the Puigdemont about session. On Sunday, a demonstration against the referendum attracted some 350,000 people, in a show of support for the Spanish government. If Puigdemont declares independence, Spanish Prime Minister Mariano Rajo has promised to take drastic action, which could include dissolving the Catalan parliament and even arresting lawmakers. Investors are casting a nervous eye on the economic ramifications of the crisis. Two major banks, Caixabank and Sabadell, as well as several large corporations have announced they are relocating their legal headquarters from Barcelona to Madrid. The tensions have not affected the euro so far, but that could change if Catalonia defies Madrid and declares independence.

High Noon for Catalan Lawmakers

Economic Calendar

Tuesday (October 10)

  • 2:00 German Trade Balance. Estimate 19.8B. Actual 21.6B
  • All Day – ECOFIN Meetings

*All release times are EDT

*Key events are in bold

DAX, Tuesday, October 10 at 6:40 EDT

Open: 12,964.50 High: 12,982.50 Low: 12,928.25 Close: 12,968.50

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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.