DAX at 5-month low on Trump tariffs, soft PMIs

The DAX index has posted losses in the Wednesday session. Currently, the index is at 12,149, down 0.50% on the day. On the release front, Eurozone and German Services PMI reports rose slightly in August. The eurozone release improved to 55.4, matching the forecast. German Services PMI climbed to 55.0, but missed the forecast of 55.2 points. Eurozone retail sales declined 0.2%, missing the estimate of 0.1%. This marked the first decline since January. On Thursday, Germany releases factory orders.

With global trade tensions grabbing the headlines, German equity markets took a beating on Tuesday. The DAX fell 1.4% and has slipped to its lowest level since early April. The most important dispute is between the U.S and China. 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. Trade trouble brews elsewhere as well. Talks are continuing between the U.S and Canada, after Friday’s deadline passed with no agreement in place. The EU has engaged in a tit-for-tat tariff exchange with the United States. The dollar has climbed significantly since trade tensions began in April, at the expense of the equity markets and other major currencies. If trade tensions continue to worsen, equity markets could continue to move lower.

Aussie jumps as growth quickens in second quarter

I’m interested but not worried, oddly enough

Economic Calendar

Wednesday (September 5)

  • 3:55 German Final Services PMI. Estimate 55.2. Actual 55.0
  • 4:00 Eurozone Final Services PMI. Estimate 54.4. Actual 54.4
  • 5:00 Eurozone Retail Sales. Estimate -0.1%. Actual -0.2%

Thursday (September 6)

  • 2:00 German Factory Orders. Estimate 1.8%

*All release times are DST

*Key events are in bold

 

DAX, Wednesday, September 5 at 6:30 DST

Previous Close: 12,210 Open: 12,147 Low: 12,077 High: 12,168 Close: 12,149

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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.