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DAX gains ground despite soft German business confidence

The DAX index has dipped lower on Thursday. Currently, the DAX is at 12,282, down 0.23% on the day. There are no German or eurozone events on the schedule. On Friday, the U.S. releases the initial reading for first-quarter GDP, with an estimate of 2.2%.

Recent German numbers have been lukewarm, as the eurozone’s largest economy is experiencing a slowdown. This has weighed on the euro, but the blue-chip DAX index shows no signs of slowing down. The index has soared in April, with gains of 6.7%. This is on track for the highest monthly gain since December 2016. On Wednesday, German Ifo Business Climate dipped to 99.2, shy of the estimate of 99.6 points. The indicator has softened since 2018, as weaker economic conditions have weighed on business confidence. Nonetheless, the DAX posted strong gains on Wednesday.

The ECB released its economic bulletin on Wednesday, which provided a somber assessment of the eurozone economy. The ECB took note of the global trade war and the downside risk to the eurozone. The report noted that large negative effects could materialise if “trade tensions were to escalate further. Uncertainty related to protectionism is weighing on economic sentiment and it may raise further, potentially eroding confidence and affecting the euro area and the global economy more significantly.”

The global trade war, which has included new tariffs between the EU and the U.S., has damaged the German and eurozone manufacturing sectors. Manufacturing PMIs are mired in negative territory, pointing to a continuing decline in manufacturing.

It’s a two-speed world out there [1]

USD/JPY near 4-month high with BOJ on hold [2]

Economic Calendar

Thursday (April 25)

Friday (April 26)

*All release times are DST

*Key events are in bold

DAX, Thursday, April 25 at 4:40 DST

Previous Close: 12,222 Open: 12,225 Low: 12,189 High: 12,230 Close: 12,282

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Kenny Fisher

Kenny Fisher [6]

Currency Analyst at Market Pulse [7]
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.