DAX plunges as Asian markets crumble

The DAX index has posted sharp losses after a positive session on Thursday. Currently, the DAX is trading at 11,094, down 1.88% on the day. In economic news, the sole eurozone indicator is German GfK Consumer Climate, which remained steady at 10.6 points. This edged above the forecast of 10.5 points. In the U.S, all eyes will be Advance GDP for the third quarter, which is expected to post a strong gain of 3.3%.

Asian equity markets are down on Friday, and European markets have followed suit. Almost all listings on the DAX are in negative territory, and Deutsche Bank has plunged 4.15%. It’s been a miserable October for the DAX, which has plunged some 9.4 percent. The DAX is hovering close to the 11,000 mark, which has held since December 2017. Investors remained unnerved over a host of crises, both in and out of Europe. These include the Italian budget crisis, the Brexit standoff, US-China relations and the death of a Saudi journalist in Turkey. Soft risk appetite and some disappointing earning reports in Europe and the U.S have sent global stock markets sharply lower.

There were no surprises from the ECB policy meeting on Thursday.The ECB maintained its main refinancing rate at a flat 0.00%, where it has been pegged since January 2016. With the euro and European stock markets heading lower this week, ECB President Mario Draghi tried to put a positive face on recent developments. Draghi acknowledged that the turmoil in global markets has raised the risks to the eurozone economy, but reiterated that the ECB remained on track to wind up its asset-purchase program in December. He discussed the eurozone’s “broad-based” economic growth and said he was confident that the Italian government would reach an agreement with the European Commission, which has rejected Italy’s budget since it raises the country’s deficit. However, Drahgi acknowledged that the eurozone economy has softened, and also noted the risks from the global trade war and the volatile political climate in Italy.

Moody US markets

OANDA European open – Markets dive on earnings

Equities Sea of red

Economic Calendar

Friday (October 26)

  • 2:00 German GfK Consumer Climate. Estimate 10.5. Actual 10.6
  • 8:30 US Advance GDP. Estimate 3.3%
  • 10:00 ECB President Draghi Speaks
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 98.9

*All release times are DST

*Key events are in bold

DAX, Friday, October 26 at 6:50 DST

Previous Close: 11,307 Open: 11,216 Low: 11,051 High: 11,216 Close: 11,094

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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.