DAX dips as German Manufacturing PMI drops in August

The DAX index has posted slight losses in the Monday session. Currently, the index is at 12,319, down 0.36% on the day. On the release front, eurozone and German Final Manufacturing PMIs both weakened in August, but were within expectations. On Tuesday, the eurozone releases PPI.

Eurozone and German manufacturing PMIs are still pointing to expansion, but there is concern in the markets as the downward trend continued in August. This was particularly evident in Eurozone Final Manufacturing PMI, which lost ground for an eighth straight month. The reading of 54.6, which matched the estimate, marked the lowest level since November 2016. In Germany, Final Manufacturing PMI fell from 56.9 to 55.9. Although this is a respectable reading, it is significantly lower than the readings we saw early in 2018, when the indicator was above the 60-level. German manufacturers remain generally optimistic, but have growing concerns over tariffs which the U.S has slapped on China and the EU.

Will the trade war between the U.S and China continue to escalate? So far, the two economic giants have imposed $50 billion in tariffs on each other, and President Trump has threatened further tariffs worth some $200 billion, which could be imposed as early as this week. The U.S could elect to impose the tariffs in smaller bites, such as a $50 billion tariff. With the U.S economy booming, there is little pressure on the Trump administration to shy away from imposing further tariffs. The current trade spat has already seen the U.S dollar gain ground against rivals such as the euro, and further tariffs could boost the U.S dollar.

A jittery start to the month of September

When central banks and the political worlds collide

Economic Calendar

Monday (September 3)

  • 3:55 German Final Manufacturing PMI. Estimate 56.1. Actual 55.9
  • 4:00 Eurozone Final Manufacturing PMI. Estimate 54.6. Actual 54.6
  • 13:15 German Buba President Weidmann Speaks

Tuesday (September 4)

  • 5:00 Eurozone PPI. Estimate 0.3%

*All release times are DST

*Key events are in bold

 

DAX, Monday, September 3 at 8:40 DST

Previous Close: 12,364 Open: 12,327 Low: 12,309 High: 12,359 Close: 12,319

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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.