DAX jumps after Chinese manufacturing PMI improves

European equity markets have started the week with strong gains, and the German DAX is up 1.13% in Monday trade. Currently, the DAX is trading at 11.652, up 1.1% on the day. In economic news, German and eurozone manufacturing PMIs missed their estimates, with readings of 44.1 and 44.7, respectively. The Eurozone CPI Flash Estimate inflation in March came in at 1.5%, just shy of the estimate of 1.4%. On Tuesday, the eurozone releases PPI.

German and eurozone manufacturing sectors remain mired in contraction territory. This is largely due to the global trade war, which has lowered the demand for exports, such as German cars and auto parts. German manufacturing PMI dropped to 44.1, losing ground for an eighth straight month. This reading was the lowest since 2012. The all-eurozone release has also been steadily falling and is pointing to significant weakness in manufacturing.

The German markets ignored the weak eurozone numbers, focusing on Chinese data instead. The Chinese Caixin Manufacturing PMI didn’t sparkle, but improved to 50.8 and easily beat the estimate of 50.1 points. Investors cheered as the indicator climbed to an 8-month high, after posting three successive releases indicating contraction. The Chinese economy has been hit hard by the trade war with the U.S., and a piece of good news was enough to raise the confidence levels of investors.

China data is no April Fools

Economic Calendar

Monday (April 1)

  • 3:55 German Final Manufacturing PMI. Estimate 44.7. Actual 44.1
  • 4:00 Eurozone Final Manufacturing PMI. Estimate 47.6. Actual 47.5
  • 5:00 Eurozone CPI Flash Estimate. Estimate 1.5%. Actual 1.4%
  • 5:00 Eurozone Core CPI Flash Estimate. Estimate 0.9%. Actual 0.8%
  • 5:00 Eurozone Unemployment Rate. Estimate 7.8%. Actual 7.8%

Tuesday (April 2)

  • 5:00 Eurozone PPI. Estimate 0.2%

*All release times are DST

*Key events are in bold

DAX, Monday, April 1 at 7:55 EST

Previous Close: 11,526 Open: 11,634 Low: 11,625 High: 11,706 Close: 11,652

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.