DAX Slides, as Global Stock Markets See Red

The DAX index has posted sharp losses in the Thursday session. Currently, the index is trading at 12,271.50, down 1.32% since the Wednesday close. European markets have followed the lead of the Asian and North American stock markets, which posted losses in the most recent session. On the release front, Germany and eurozone PMIs continue to point to strong expansion. German Manufacturing PMI dipped to 60.6, above the estimate of 60.3 points. It was a similar trend for the eurozone indicator, which dropped to 58.6, just above the estimate of 58.5 points. As well, the eurozone unemployment rate dipped lower to 8.6%, matching the forecast. In the US, Fed chair Jerome Powell testifies before the Senate Banking Committee. On Friday, Germany releases Retail Sales.

The eurozone continues to post steady economic growth, and the bloc’s unemployment rate has dropped to 8.6%. Still, inflation levels remain well below the ECB target of around 2 percent. In February, Eurozone CPI edged lower to 1.2%, down from 1.3% in January. With plenty of slack in the eurozone economy, the ECB is not under pressure to tighten policy. The Bank will meet on March 8, and no major changes are expected. Policymakers could deliberate the possibility of removing the Bank’s easing bias towards increasing bond purchases if needed. A removal of the easing bias would likely be interpreted as a plan to tighten policy, which would be a vote of confidence in the economy and could rally European stock markets.

Round Two with Fed Chair Powell

Jerome Powell is just settling into his new job, but it’s been an eventful few weeks for the new Federal Reserve chair. Powell was greeted by a sharp correction in US stock markets, as investors headed for the hills on fears that the Fed might accelerate its pace of rate hikes if inflation moves higher. On Tuesday, Powell testified before a congressional committee, and will speak before the Senate Banking Committee on Thursday. Powell’s message to Congress was decidedly hawkish, as the Fed chair said that the current policy of gradual rate increases would continue. He added that the economy was strong and that he expected inflation to move up to the Fed target of 2 percent. Importantly, Powell did not address the question of an acceleration of rate hikes, but his hawkish stance has increased the likelihood that the Fed will increase it projection from three to four rate hikes this year.


Economic Calendar

Thursday (March 1)

  • 3:55 German Final Manufacturing PMI. Estimate 60.3. Actual 60.6
  • 4:00 Eurozone Final Manufacturing PMI. Estimate 58.5. Actual 58.6
  • 5:00 Eurozone Unemployment Rate. Estimate 8.6%. Actual 8.6%
  • 10:00 US Fed Chair Powell Testifies

Friday (March 2)

  • 2:00 German Retail Sales. Estimate 0.8%

*All release times are EST

*Key events are in bold

DAX, Thursday, March 1 at 5:50 EDT


Open: 12,385.50 High: 12,391.00 Low: 12,232.00 Close:  12,271.50

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

Market Analyst at OANDA
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.