DAX under pressure after Draghi’s sour speech

The DAX index has posted losses on Wednesday, after starting the week with two winning sessions. Currently, the DAX is trading at 11,389, down 0.26%. In economic news, there are no major eurozone or German numbers. ECB Mario Draghi spoke at an ECB event in Frankfurt. On Thursday, Germany releases CPI.

ECB President Mario Draghi sounded pessimistic when talking about the eurozone economy on Wednesday. Draghi acknowledged that the economic slowdown which started in the second half of 2018 had extended into 2019. Draghi blamed uncertainty in the global economy, adding that “risks to the outlook remained tilted to the downside”. With weak conditions in the eurozone and Germany, the ECB is expected to remain dovish in its stance.

German confidence indicators were soft in March, raising concerns about the health of the biggest economy in the eurozone. The week started with consumer climate, which dropped to 10.4 points, after two successive readings of 10.8 points. With the eurozone mired in an economic slowdown and German numbers pointing to weaker growth, it’s not surprising that the German consumer has become less optimistic. On Tuesday, German business confidence improved slightly in March, with a reading of 99.6 points. The markets have been accustomed to releases above the 100-level, and the February reading of 98.5 was the weakest since November 2014. The survey noted that any improvement was confined to domestic sectors, such as construction and retail services. The ongoing global trade war has dampened demand for German exports, especially vehicles and auto parts. This has weighed on automaker shares on the DAX.

Lest we quickly forget

Today’s U.K Parliament Brexit Agenda

Economic Calendar

Wednesday (March 27)

  • 4:00 ECB President Draghi Speaks
  • Tentative – German 10-year Bond Auction

Thursday (March 28)

  • All Day – German Preliminary CPI. Estimate 0.6%

*All release times are DST

*Key events are in bold

DAX, Wednesday, March 27 at 7:45 EST

Previous Close: 11,419 Open: 11,443 Low: 11,367 High: 11,449 Close: 11,389

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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.