DAX Edges Lower To Start off Week, German Investor Confidence Next

The DAX Index has edged lower in Monday trading. Currently, the DAX is trading at 12,208.69. In economic news, Eurozone Sentix Investor Confidence jumped to 23.9, beating the estimate of 20.1 points. On Tuesday, Germany releases ZEW Economic Sentiment, a key indicator which should be treated as a market-mover.

The eurozone economy has shown stronger growth in the first quarter, and this has been reflected in the DAX ,which has recorded gains of 4.8 percent during this time. Germany has led the way, with strong manufacturing and services numbers. With economic conditions improving, investor confidence levels have followed suit and posted strong numbers in Q1. Eurozone Sentix Investor Confidence climbed to 23.9 points in April, pointing to strong optimism among investors and analysts. On Tuesday, Germany releases ZEW Economic Sentiment, which surveys the mood of German investors. The markets are expecting a strong reading for April, with the indicator expected to climb to 13.2 points, up from 12.8 points in March.

The US labor market remains very tight, but there was surprising news on Friday, as Nonfarm Payrolls was a big disappointment. The economy produced just 98 thousand jobs in March, way off the forecast of 174 thousand. However, the DAX shrugged off the weak numbers. The good news is that the weak reading was not accompanied by higher unemployment numbers. The unemployment rate dropped to 4.5% and jobless claims fell sharply to 234 thousand. This means that the soft payrolls report is unlikely to change the Fed’s expected course of action of two more hikes in 2017 (a majority of FOMC voting members favor two more hikes, while some members have called for three more hikes this year). According to the CME Group, the markets have circled June as the next likely date for a hike, which is priced in at 67 percent. The Fed would like to see inflation move closer to its target of two percent, and we’ll get a look at US consumer inflation reports on Friday.

Economic Calendar

Monday (April 10)

• 8:00 Italian Industrial Production. Estimate 0.4%. Actual 1.0%
• 8:30 Eurozone Sentix Investor Confidence. Estimate 20.1. Actual 23.9

Tuesday (April 11)

• 9:00 German ZEW Economic Sentiment. Estimate 13.2
• 9:00 Eurozone Industrial Production. Estimate 0.2%
• 9:00 Eurozone Economic Sentiment. Estimate 25.0

*All release times are EST

*Key events are in bold

DAX, Monday, April 10 at 7:45 EST

Open: 12,176.50 High: 12,251.00 Low: 12,1576.50 Close: 12,208.69

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