DAX Loses Ground, Investors Search for Cues

German stock markets are open after a two-day break, and the DAX has lost ground in the Wednesday session. Currently, the index is at 13,040.50, down 0.25% on the day. There are no eurozone or German indicators on the schedule, so traders can expect a quiet Wednesday session.

European stock markets dropped considerably after last week’s election in Catalonia. The DAX has declined 1.8% since the election, as investors reacted negatively to the results, which showed a majority for the pro-independence parties. The vote is a stinging rebuke for Spanish Prime Minister Mariano Rajoy, who imposed direct rule on the region after Catalan leader Carles Puidgemont declared independence from Spain. Rajoy’s heavy-handed approach has not hampered the pro-independence movement, and Spain could be headed for more political turmoil in the coming months.

It’s a light week on the fundamental side, so investors will be keeping a close eye on Germany Final CPI, which will be released on Friday. The markets are predicting a strong gain of 0.5%. In November, the indicator improved to 0.3%, marking a 4-month high. In the eurozone, annual average inflation also inched higher to 1.5% in November, up from 1.4% in October. This marked a multi-year high. In a nod to stronger economic activity in 2017, the ECB raised its forecasts for growth and inflation for the eurozone from this year through to 2019. Still, inflation remains well below the ECB target of around 2.0%, and ECB policymakers are unlikely to announce an end to their stimulus package until inflation moves closer to the 2.0% target.

Economic Calendar

Wednesday (December 27)

  • There are no German or eurozone events

*All release times are GMT

*Key events are in bold

DAX, Wednesday, December 27 at 6:40 EDT

Open: 13,061.00 High: 13,132.75 Low: 13,031.25 Close: 13,040.50

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

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.