DAX Trading Sideways after Eurozone, Germany GDP

The DAX continues to trade quietly this week. In the Tuesday session, the DAX is at 12,991 points, up 0.10% on the day. On the release front, German Preliminary GDP came in at 0.3%, close to the forecast of 0.4%. Eurozone GDP came in at 0.4%, matching the forecast. German ZEW Economic Sentiment came in at -8.2, weaker than the estimate of -8.0 points. Eurozone ZEW Economic Sentiment was stronger, improving to 2.4 points. This beat the estimate of 2.0 points. On Wednesday, Germany and the eurozone release CPI reports and ECB Governor Mario Draghi will speak at an ECB event in Frankfurt.

There were no surprises from German and Eurozone GDP data for the first quarter, as both indicators were within expectations. The data has raised concerns, however, as the Q1 numbers are pointing to a slowdown – in Q4 of 2018, both Germany and the eurozone posted gains of 0.6%. Will economic conditions improve in Q2? Institutional analysts don’t seem optimistic, according to the well-respected ZEW Economic Sentiment surveys. The German indicator posted a sharp drop of -8.2 for a second straight month – the first declines since July 2016. The eurozone release improved to 2.4, but low reading certainly doesn’t show much optimism. The markets are bracing for more soft numbers on Wednesday, as Germany and eurozone release CPI reports. If these indicators miss their estimates, the euro could lose ground.

Bank of France Governor Francois Villeroy de Galhau raised some eyebrows on Monday after making hawkish comments about ECB interest rates hikes. Villeroy said that the ECB could soon provide additional guidance on the timing of a rate hike. In its last rate statement, the ECB said that any rate hikes would occur ‘well past’ the wrap-up of the stimulus program, which is slated to end in September. Villeroy stated that ‘well past’ could be a matter of quarters, rather than years. Investors snapped up euros on Monday after Villeroy’s comment, but the euro failed to hold onto these gains and ended the Monday session with small losses.

Yields in focus, again

Rate Differentials and Trade Fears Handcuff Capital Markets


Economic Fundamentals

Tuesday (May 15)

  • 2:00 German Preliminary GDP. Estimate 0.4%. Actual 0.3%
  • 5:00 Eurozone Flash GDP. Estimate 0.4%. Actual 0.4%
  • 5:00 German ZEW Economic Sentiment. Estimate -8.0. Actual -8.2
  • 5:00 Eurozone Industrial Production. Estimate 0.6%. Actual 0.5%
  • 5:00 Eurozone ZEW Economic Sentiment. Estimate 2.0. Actual 2.4

Wednesday (May 16)

  • 14:00 German Final CPI. Estimate 0.0%
  • 5:00 Eurozone Final CPI. Estimate 1.2%
  • 8:00 ECB President Mario Draghi Speaks

*All release times are DST

*Key events are in bold


DAX, Tuesday, May 15 at 7:25 DST

Prev. Close: 12,977 Open: 12,948 Low: 12,937 High: 13,006 Close: 12,991

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Kenny Fisher

Kenny Fisher

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