The DAX index has recorded slight gains in the Friday session, gaining 0.31%. Currently, the DAX is trading at 12,637.50. Financial stocks are broadly higher, led by Commerzbank, which has gained 0.59%. In economic news, German PPI improved to 0.4%, beating the estimate of 0.2%. Later, the eurozone releases current account and consumer confidence.
Stock markets were down this week, and the DAX index fell 1.5%, courtesy of the political chaos in Washington, which has made investors jittery. The Trump administration has not had much success in damage control, and there is no sign of the political firestorms letting up any time soon. It was a week of true political drama on Capitol Hill and in the White House. The Justice Department, under strong bilateral pressure, has appointed a former FBI director as a special prosecutor to investigate possible Russian involvement in the US presidential election as well as any connection between Trump and the Russians during the election campaign. President Trump fired back on Thursday, angrily denouncing this move as a “witch hunt”. The media and the Democrats have had a field day with Trump’s troubles, and even Republicans are expressing unease with an administration that appears rudderless and is staggering from crisis to crisis. Trump has been relentlessly dogged by accusations of being cozy with the Russians, and his meeting with the Russian foreign minister last week was a public relations disaster, as the president came under heavy criticism for releasing classified information at the meeting. The latest string of controversies has had a chilling effect on global stock markets, and the downward trend could continue if the crisis in Washington worsens.
German and eurozone inflation indicators remain solid in 2017. German inflation figures were stronger in the first quarter, but inflation numbers continue to meet or exceed the forecasts in the second quarter. Producer Prices posted a gain of 0.4% in April, and the Wholesale Price Index gained 0.3% in April. The news was not as good from Final CPI, which dipped to 0.0%, marking a 3-month low. Still, this figure matched the estimate. In the eurozone, Final CPI for April matched the forecast with a strong gain of 1.9% in April, considerably higher than last month’s gain of 1.5%. Eurozone inflation is once again closing in on the ECB’s target of 2.0%, which could increase pressure on the ECB to consider tapering its ultra-loose monetary policy. However, the ECB seems content to hold course on interest rates and its quantitative easing program, and the central bank will be reluctant to make any moves with key elections coming up in France and Germany.
No Reprieve for Dollar as Trump Troubles Mount
Political Uncertainty Roils Global Markets
Economic Calendar
Friday (May 19)
- 4:00 Eurozone Current Account. Estimate 32.3B
- 10:00 Eurozone Consumer Confidence. Estimate -3
*All release times are EDT
*Key events are in bold
DAX, Friday, May 19 at 5:10 EDT
Open: 12,609.50 High: 12,593.00 Low: 12,649.00 Close: 12,637.50
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Kenny Fisher
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