DAX gains ground, but weak eurozone inflation raises concerns

The DAX index has posted gains in the Thursday session. Currently, the index is at 10,879, up 0.25% on the day. In economic news, Eurozone CPI dropped sharply to 1.6% in December, down from 1.9% a month earlier. This marked the lowest level since April.

With the eurozone struggling, there are plenty of headaches for ECB policymakers, and Mario Draghi shared some of his concerns on Tuesday at a plenary session on the ECB annual report. Draghi highlighted Brexit and the U.S-China trade war as significant concerns and noted that eurozone economic conditions have been weaker than expected, adding that the eurozone was undergoing a slowdown but was not heading into recession. The ECB holds its next policy meeting on January 24, with no change in monetary policy expected.

The DAX has recorded five straight months in the red, but that could change in January, as the index has posted strong gains of 3.9% in January. This is a far cry from the December meltdown of 8.4%, as equity markets try to shake off an awful 2018. Still, there are dark clouds on the horizon. The global trade war has hurt the eurozone export and manufacturing sectors, and the giant Chinese economy continues to show signs of a slowdown. Earlier in the week, China released dismal economic numbers, with exports down 4.4 percent from a year earlier and imports plunging 7.6 percent. The slowdown in China has taken a toll on corporate profits and continues to be a major concern for investors and policymakers.

Economic Calendar

Thursday (January 17)

  • 5:00 Eurozone Final CPI. Estimate 1.7%. Actual 1.6%
  • 5:00 Eurozone Final Core CPI. Estimate 1.0%. Actual 1.0%

*All release times are DST

*Key events are in bold

DAX, Thursday, January 17 at 8:50 EST

Open: 10,852 Low: 10,822 High: 10,914 Close: 10,879

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

Market Analyst at OANDA
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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