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DAX under pressure over Italy budget

The DAX index has posted losses in the Wednesday session. Currently, the index is at 12,287 points, down 0.42% since Tuesday. In economic news, Germany and Eurozone services PMIs improved in September, with readings of 55.9 and 54.7 points, respectively. Eurozone retail sales declined 0.2%, missing the estimate of +0.2%.

The German and Eurozone services PMIs continued to show expansion in September. German Services PMI climbed from 55.0 to 55.9 points. This reading was the strongest since February, but missed the forecast of 56.5 points. Eurozone Services PMI improved to 54.7, matching the forecast. The news was less rosy from Eurozone retail sales, which posted a decline of 0.2% for a second straight month.

With Italy and the EU on a possible collision course over Italy’s budget, European markets remain under pressure. The European Union is unhappy with the proposed Italian budget, which increases spending, lowers taxes and sets the budget deficit at 2.4% of GDP for 2019. The European Commission must approve the budget, and EU policymakers have been pushing Rome to reduce the current deficit, which stands at 1.6% of GDP. EU Commissioner Pierre Moscovici said last week that the budget could breach EU fiscal regulations and called the Italian deficit “explosive”. The populist Italian government appeared to backtrack on Wednesday, and has now said that the budget deficit could be lowered in 2020 and 2021. Still, the budget remains a sore point for the EU, and the euro could lose ground if the EU and Italy remain at loggerheads over Italy’s fiscal policy.

Oil has sprung another gusher [1]

Risk sentiment is shifting and headline-driven [2]

Economic Calendar

Wednesday (October 3)

*All release times are DST

*Key events are in bold


DAX, Wednesday, October 3 at 6:25 DST

Previous Close: 12,287 Open: 12,233 Low: 12,203 High: 12,310 Close: 12,287

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 [6]

Market Analyst at OANDA [7]
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

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