DAX Moves Higher on Solid Eurozone Reports

The DAX has started the week with slight gains. Currently, the index is at 13,357.00, up 0.27% on the day. On the release front, German Factory Orders disappointed, with a decline of 0.4%. This was well short of the estimate of a 0.1% gain. In the Eurozone, Sentix Investor Confidence improved to 32.9, above the estimate of 31.5 points. Retail Sales rebounded with a strong gain of 1.5%, beating the estimate of 1.4%. On Tuesday, Germany releases Industrial Production and Trade Balance.

World stock markets have been pointing upwards early in the New Year, and the DAX has also looked sharp. The index climbed 3.3% last week, as German and eurozone data continues to please investors. Led by a robust German economy, the eurozone is on track for a strong fourth quarter, as the economy continues to expand and unemployment falls. Inflation has also moved higher, although the ECB is unlikely to reconsider its current stimulus program, which ends in September.

The German economy continues to look strong, despite a soft Factory Orders report for December. Retail Sales soared 2.3%, its fastest pace since October 2016. Services and Manufacturing PMIs improved and continue to point to strong expansion. The labor market remains robust, as unemployment rolls dropped sharply. However, the political landscape in the eurozone’s largest economy remains cloudy. President Angela Merkel is now looking at the Social Democrats to help her make a new government, and preliminary talks are scheduled to begin on Sunday. The negotiations are likely to be lengthy, and the current caretaker government could remain in office for several more months.

 

Economic Calendar

Monday (January 8)

  • 2:00 German Factory Orders. Estimate +0.1%. Actual -0.4%
  • 4:30 Eurozone Sentix Investor Confidence. Estimate 31.5. Actual 32.9
  • 5:00 Eurozone Retail Sales. Estimate 1.4%. Actual 1.5%

Tuesday (January 9)

  • 2:00 German Industrial Production. Estimate 1.9%
  • 2:00 German Trade Balance. Estimate 20.7B
  • 5:00 Eurozone Unemployment Rate. Estimate 8.7%

*All release times are GMT

*Key events are in bold

 

DAX, Monday, January 8 at 8:40 EDT

Open: 13,394.50 High: 13,410.00 Low: 13,335.00 Close: 13,357.00

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

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.