The DAX is showing little movement on Wednesday, continuing what has been an uneventful week. Currently, the DAX is trading at 12,739.00. On the release front, it’s a very light schedule, with no eurozone or German events. Market focus will be directed towards The Hague, where ECB President Mario Draghi will speak about monetary policy in the Dutch House of Representatives. On Thursday, the spotlight will be on inflation indicators, with Germany releasing WPI and the US publishing PPI.
The eurozone has posted stronger numbers in the first quarter, and this has included industrial better production and manufacturing numbers in Germany. Industrial production in March declined 0.4%, but this was just a blip, as industrial production in the first quarter posted a respectable gain of 1.6%. German Factory Orders came in at 1.0%, above the forecast of 0.7%. An improvement in global economic conditions has boosted the demand for German exports, notably cars and machinery. A weak euro has made European exports more attractive and helped boost the manufacturing sector. Germany releases Preliminary GDP for the first quarter on Friday, with the markets predicting a gain of 0.6%. A better than expected GDP report could shake the DAX out of its slumber and push the index to higher levels.
Donald Trump is not one to shy away from controversy, but has he gone one step too far? Trump abruptly fired FBI director James Comey on Tuesday, stunning the political establishment in Washington. Comey, who has been conducting an investigation into possible collusion between Trump and Russia during the presidential campaign, clearly has been a thorn in Trump’s side. The White House has claimed that it fired Comey over his handling of an email scandal involving Hillary Clinton, but the move has been roundly condemned by the Democrats, and some key Republicans have also voiced opposition as well. The political firestorm could heat up further, with calls in Congress to appoint a special prosecutor into Trump’s connections with Russia. The dollar has already recorded some losses since the firing, and Trump’s latest escapade could cause some jitters among investors and send the stock markets downwards.
Wednesday (May 10)
- 8:00 ECB President Mario Draghi Speaks
Thursday (May 11)
- 2:00 German WPI. Estimate 0.1%
- 4:00 ECB Economic Bulletin
- 5:00 EU Economic Forecasts
- 8:30 US PPI. Estimate 0.2%
*All release times are EDT
*Key events are in bold
DAX, Wednesday, May 10 at 8:10 EDT
Open: 12,714.50 High: 12,762.50 Low: 12,714.50 Close: 12,759.00
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