- MarketPulse - https://www.marketpulse.com -

DAX edges higher, investors eye German CPI

The DAX index has posted slight gains in the Wednesday session. Currently, the index is at 12,539, up 0.10% on the day. In economic news, German GfK Consumer Climate edged lower to 10.5, shy of the estimate of 10.6 points. In the U.S, Preliminary GDP in the second quarter is expected at 4.0%. The previous GDP report came in at 4.1% in July. On Thursday, Germany releases Preliminary CPI.

The DAX showed gains on Monday, in response to an unexpectedly strong business confidence report in Germany. The Ifo Business Climate report improved to 103.8, easily beating the estimate of 101.9 points. This marked the first time this year that business confidence has improved, thanks to a strong German economy and a pause in the global trade war. On Wednesday, the news was less positive, as German GfK Consumer Climate dropped from 10.6 to 10.5 points, continuing the downward trend which has marked 2017. Back in January, the indicator was at 11.0 points, underscoring a decrease in consumer confidence.

It has been a rough August for the DAX, which has dropped 2.2%. Still, with the ECB unlikely to raise interest rates in the near future, investors may prefer the equity markets over the euro. The currency was last above the 1.20 line in May, and this symbolic level could remain elusive for quite some time. The reason? Mario Draghi and his ECB colleagues continue to send out the message that the ECB has no plans to raise rates until after the summer of 2019. The markets are not expecting a rate hike before October 2019, which means that the euro is not particularly attractive unless there is an unexpected improvement in the German and eurozone economies.

Economic Calendar

Wednesday (August 29)

Thursday (August 30)

*All release times are DST

*Key events are in bold

DAX, Wednesday, August 29 at 8:30 DST

Previous Close: 12,527 Open: 12,551 Low: 12,498 High: 12,566 Close: 12,539

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 [4]

Market Analyst at OANDA [5]
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

Latest posts by Kenny Fisher (see all [4])