DAX dips as investors warily watch oil spike

The DAX index has started the week with slight losses. On Tuesday, the DAX is at 12,193, down 0.23% on the day. In economic news, there is only one event on the schedule. The eurozone releases consumer confidence, which is projected to remain unchanged at -7 points for a third straight month. On Wednesday, Gemany releases the Ifo Business Climate index.

Crude oil prices jumped to a 5-month high after the Trump administration announced that it would terminate sanction waivers given to some importers of Iranian oil, as of May 1. This move is intended to further tighten sanctions against Iran and cripple Iranian oil exports. The move has been bitterly criticized by Iran, which has upped the ante by threatening to close the Strait of Hormuz, a critical gateway for seaborne oil shipments. The rising geopolitical temperature could further boost oil prices, which are up 50% since December. Higher oil prices could weigh on economic growth and send stock markets lower.

With the eurozone mired in an economic slowdown, investors are hoping that the German locomotive will pull the rest of the eurozone back onto the tracks. German numbers have also disappointed, particularly manufacturing, which has been hit hard by the global trade war. Not unsurprisingly, German business climate has been steadily losing ground since the middle of 2018, reflective of weakening economic conditions. Still, the indicator remains close to the symbolic 100-level, and the April estimate stands at 99.9 points.

US sparks Asia oil rush

Economic Calendar

Tuesday (April 23)

  • 10:00 Eurozone Consumer Confidence. Estimate -7

Wednesday (April 24)

  • 4:00 German Ifo Business Climate. Estimate 99.9

*All release times are DST

*Key events are in bold

DAX, Tuesday, April 23 at 7:15 DST

Previous Close: 12,222 Open: 12,25 Low: 12,189 High: 12,230 Close: 12,194

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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.