DAX sinks to 3-week low on concerns over U.S.-China trade spat

The DAX index has paused for breath in the Friday session, after sharp losses on Thursday. The DAX is currently trading at 10,976 down 0.41% on the day. On the release front, there are no major German or eurozone indicators. Germany’s trade surplus widened to EUR 19.4 billion, above the estimate of EUR 18.3 billion.

Investors remain jittery about trade tensions between the U.S and China, which have been the catalyst for the global trade war which was rocked equity markets. Although the sides met for talks last week in Washington, there have been no signs of progress. On Thursday, U.S. stock markets fell after President Trump said that he had no plans to meet with Chinese President Xi before March 2, when further U.S. tariffs are scheduled to be imposed. This has raised concerns that a trade deal will not be reached prior to the March 2 deadline. On the DAX, bank and automotive shares have dropped sharply. Deutsche Bank has declined 1.08%, and Daimler, BMW and Volkswagen have all dropped over 1.2%.

The European Commission has projected moderate growth in the EU in 2019, but economic uncertainty has dampened confidence. The forecast lowered its growth forecast for the eurozone to 1.9% in 2018, down from 2.1% in the November forecast. For 2019, the growth forecast has also been revised down to 1.5%, compared to 1.9% in the November forecast. Inflation slipped in late 2018 due to lower oil prices, with an average inflation level of 1.7%. This is expected to dip to 1.6% in 2019. The report highlighted Brexit and the slowdown in China as key sources of uncertainty for European economies, adding that the projections were subject to downside risks.

Trade war worries weigh on markets

Aussie drops as RBA downgrades growth forecast

Dollar in demand for now, but….

Friday (February 8)

  • 2:00 German Trade Balance. Estimate 18.3B. Actual 19.4B

*All release times are DST

*Key events are in bold

DAX, Friday, February 8 at 7:10 EST

Previous Close: 11,022 Open: 11,981 Low: 10,981 High: 11,047 Close: 11,008

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

Latest posts by Kenny Fisher (see all)