The DAX index has posted losses in the Thursday session. Currently, the DAX is trading at 11,314, down 0.54% on the day. On the release front, German Preliminary CPI is expected to post a gain of 0.2%, unchanged from the previous release. German unemployment change came in at -16 thousand, better than the forecast of -10 thousand. Later in the day, the ECB releases its semi-annual financial stability report. On Friday, the eurozone releases CPI Flash Estimate and G-20 leaders gather in Argentina.
Investors will be glued to the upcoming G-20 summit in Argentina. President Trump is expected to meet on the sidelines with Chinese President Xi Jinping with the two leaders sure to discuss the full-blown trade war between the world’s two largest economies. President Trump has taken a tough line ahead of the summit, threatening to raise the tariffs from 10 percent to 25 percent on $250 billion worth of Chinese goods. If Trump makes good on his threat, we could see a sharp downturn in the stock markets. However, the unpredictable Trump is known to prefer to reach a deal whenever possible, so his sharp rhetoric could be some grandstanding ahead of his crucial meeting with Xi. If the two leaders can “agree to disagree” and continue talking, risk appetite will improve and the stock markets would likely climb.
German confidence indicators slowed in November, and that could be bad news for the German and eurozone economies. GfK consumer climate dropped to 10.4 points, its weakest level since May 2017. Earlier in the week, Ifo Business Climate dropped to 102.3, missing the forecast of 102.0 points. This marked a 4-month low. The ongoing U.S-China trade war has hurt the German export sector, as German companies that export to both the U.S. and China are now facing higher tariffs. Germany’s economy posted a rare decline in the third quarter, with a contraction of 0.2%. Another problem is lower eurozone growth, as weak economic activity in the third quarter appears to be the story in the fourth quarter. As well, the looming departure of Britain from the European Union and the crisis over the Italian budget have weighed on business and consumer confidence levels in Germany.
Thursday (November 29)
- All Day – German Preliminary CPI. Estimate 0.2%
- 3:55 German Unemployment Change. Estimate -10K. Actual -16K
- 6:30 ECB Financial Stability Review
Friday (November 30)
- Day 1 – G-20 Meetings
- 2:00 German Import Prices. Estimate 0.4%
- 2:00 German Retail Sales. Estimate 0.4%
- 5:00 Eurozone CPI Flash Estimate. Estimate 2.1%
- 5:00 Eurozone Core CPI Flash Estimate. Estimate 1.1%
- 5:00 Eurozone Unemployment Rate. Estimate 8.0%
*All release times are DST
*Key events are in bold
DAX, Thursday, November 30 at 6:50 EST
Open: 11,377 Low: 11,313 High: 11,403 Close: 11,314
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