DAX steady as US-China talks cheers investors

After recording sharp losses on Wednesday, the DAX index has reversed directions in the Thursday session. In the North American session, the pair is trading at 12,200 up 0.13% on the day.  On the release front, there was disappointing news on the inflation front. German Wholesale Price Index dropped to 0.0%, short of the estimate of 0.5%. The eurozone trade surplus narrowed to EUR 16.7 billion, missing the estimate of EUR 17.0 billion. On Friday, eurozone releases Final CPI.

European stock markets have endured a dismal August, with the DAX down 4.6 percent. On Wednesday, the DAX dropped to its lowest level since the first week in July. These losses have corresponded with strong losses from the euro in August, reflective of investors showing a preference for assets like the U.S dollar over the euro and European shares. Investors are in a better mood on Thursday, on the news that the U.S and China will be holding trade talks at the end of the month. The negotiations will be handled by low-level officials and are being billed as ‘talks about talks’. Still, the markets are hopeful that the two sides are talking rather than slapping tariffs against each other.

Eurozone GDP in the second quarter managed to beat the estimate, but investors were not impressed. The economy posted a modest gain of 0.4% for a second straight quarter. The estimate stood at 0.3%. Concern about the eurozone economy was underscored by another negative reading from the German Economic Sentiment. The indicator gained ground in August but still remains in negative territory, with a reading of -13.7 points. This marked a fourth straight decline.

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Economic Calendar

Thursday (August 16)

  • 2:00 German WPI. Estimate 0.5%. Actual 0.0%
  • 5:00 Eurozone Trade Balance. Estimate 17.0B. Actual 16.7B

Friday (August 17)

  • 5:00 Eurozone Final CPI. Estimate 2.1%
  • 5:00 Eurozone Final Core CPI. Estimate 1.1%

*All release times are DST

*Key events are in bold

DAX, Thursday, August 16 at 8:30 DST

Previous Close: 12,163 Open: 12,216 Low: 12,167 High: 12,226 Close: 12,200

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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.