DAX Higher as Trump Eases Up on Tariff Rhetoric

The DAX index has posted gains in the Monday session. Currently, the DAX is trading at 12,400.00, up 0.44% since the Friday close. It’s a quiet start to the week, with no eurozone indicators.

It was an excellent week for European stock markets, and the DAX surged with a 4.4% gain. There was concern on the part of investors after US President Trump made good on his threat and imposed stiff tariffs on steel imports, drawing harsh criticism from the EU. However, Trump has exempted Canada and  Mexico from the tariffs, and has said that Washington could ease the duties on other countries as well. Importantly, is strong domestic opposition to Trump’s move, including senior Republican lawmakers who have said they will work to overturn the tariffs, which could spark an all-out trade war. So far, the markets are confident that a solution to the tariff tussle will be found.

The ECB didn’t change the benchmark interest rate on Thursday, which remained pegged at 0.00%. Still, the ECB meeting had plenty of drama, as policymakers removed a long-standing clause known as ‘easing bias’, which stated that monthly asset purchases could be increased if economic conditions were to worsen. The removal of easing bias can be seen as a small step towards winding up the asset program, which is scheduled to end in September. However, Mario Draghi dampened the party, saying that that eurozone inflation could remain subdued, so the Bank’s monetary policy would remain ‘reactive’. Investors took the comments as a sign that the ECB is no rush to tighten monetary policy, which boosted the German stock markets, while sending the euro sharply downwards.

Markets Buoyed By Jobs Data and US Tariff Update

Economic Calendar

Friday (March 9)

  • 2:00 German Industrial Production. Estimate +0.6%. Actual -0.1%
  • 2:00 German Trade Balance. Estimate 21.2B. Actual 21.3B
  • 8:30 US Average Hourly Earnings. Estimate 0.2%
  • 8:30 US Nonfarm Employment Change. Estimate 205K

*All release times are EST

*Key events are in bold

DAX, Monday, March 12 at 7:30 EDT

Prev. Close: 12,346.68  Open: 12,467.96 High: 12,467.96 Low: 12,390.92 Close: 12,400.00

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

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.
Kenny Fisher

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