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DAX Starts Week With Gains as Eurozone CPI Improves

The DAX index has posted slight gains in the Monday session. Currently, the DAX is trading at 12,552.00, up 0.30% on the day. On the release front, Eurozone Final CPI improved to 1.5%, matching the forecast. On Tuesday, Germany releases ZEW Economic Sentiment, which is expected to improve to 12.3 points.

With less than a week to go before the  German federal election, Angela Merkel is widely expected to win her fourth term as prime minister. Merkel’s CDU conservative party has a 14 percent lead over the center-left SPD, its current coalition partner. Another option for Merkel is the FDP, but the latter has insisted on receiving the finance ministry, and has also taken a hard line on immigration which Merkel may not be comfortable with. Germany’s position in Europe will be even more dominant when Britain leaves the European Union, which may leave some members of the EU uneasy.

French President Emmanuel Macron, a staunch supporter of a unified Europe, is hoping to continue working with Merkel and reform the eurozone. Macron’s proposal includes a eurozone finance minister who would be in charge of a eurozone budget. Macron’s call for greater cooperation is linked to Britain’s exit from the EU, which could lead to divisions among the remaining 27 members in the bloc. However, the French ambitious plan will need Germany’s support before it can become a reality. Will Germany embrace the idea? Angela Merkel has indicated that she is open to the idea, but Jean-Claude Juckner, head of the European Commission, came out against the plan last week. Juckner said he favored a finance minister for the EU but was against a separate eurozone budget and finance minister. Even if the plan is not adopted, we can expect a Macron-Merkel alliance to take steps which will strengthen Franco-German ties and further unify the eurozone.

 

Economic Calendar

Monday (September 18)

Tuesday (September 19)

*All release times are EDT

*Key events are in bold

 

DAX, Monday, September 18 at 8:20 EDT

Open: 12,601.25 High: 12,615.00 Low: 12,536.00 Close: 12,552.00

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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