DAX dips as investors look for clues

The DAX index has posted slight gains in the Wednesday session, erasing most of the gains seen on Tuesday. Currently, the DAX is at 11,606, down 0.22% on the day. There are no eurozone or German events on the calendar. In the U.S., the major event is ADP nonfarm payrolls, which is expected to dip to 190 thousand. On Thursday, the ECB is expected to maintain interest rates at 0.00%.

The U.S-China trade war has weighed on the global economy and caused significant volatility in the equity markets. Now that trade tensions have eased between the two super-economies, investor risk appetite has improved. If progress continues and the sides ink an agreement, traders can expect the markets to climb sharply. An agreement between the U.S. and China cannot come fast enough for Germany, the locomotive of the eurozone. The OECD has lowered its 2019 GDP forecast to 0.7%, down from 1.6% in November.

All eyes are on the ECB, which releases a rate statement on Thursday. The bank has pegged interest rates at a flat 0.00% since March of 2016. Economic activity in the eurozone has not been strong enough to warrant rate hikes over the past two years. At the same time, with the ECB winding up its massive stimulus program in December, any improvement in economic data (or rise in inflation) will raise speculation about a rate hike. The eurozone economy showed some strength in the first half of 2018, which led to talk of a rate hike in the second half of 2019. However, with Germany and the eurozone in the midst of a slowdown triggered by global trade tensions, it’s unlikely that the ECB will make a rate move before 2020.

Euro trades softer as ECB looms

Economic Calendar

  • There are no German or eurozone events

*All release times are DST

*Key events are in bold

DAX, Wednesday, March 6 at 6:40 EST

Previous Close: 11,620 Open: 11,594 Low: 11,564 High: 11,608 Close: 11,595

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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.