DAX edges higher despite soft German manufacturing PMI

The DAX index has posted gains in the Thursday session. Currently, the DAX is at 12,363, up 0.16% on the day. In economic news, German and eurozone manufacturing PMIs were within expectations, with readings of 44.4 and 47.9, respectively. German retail sales declined by 0.2%, better than the estimate of -0.5%. On Friday, the eurozone releases CPI Flash Estimate.

Manufacturing remains a sore spot in Germany and the rest of the eurozone, as underscored by the April manufacturing PMIs. The indicators continue to point to contraction in the manufacturing sector, although there was some slight improvement in April, compared to the March scores. Weaker global demand and taken a heavy toll on exports from Germany and the eurozone, which has damaged the manufacturing sectors. German retail sales declined in March, as nervous consumers held tight to their purse strings.

The Federal Reserve remained on the sidelines and maintained the benchmark rate at a range between 2.25% and 2.50%. As this had been priced in by the markets, investors were more interested in the tone of the rate statement. The statement noted that inflation pressures are muted and that the FOMC would remain patient regarding future rate movements. Jerome Powell reinforced this stance at a follow-up press conference, saying “we don’t see a strong case for moving in either direction”. The Fed is already on record as saying it does not expect to raise rates before 2020, and with inflation levels persistently below the Fed’s target of 2.0%, the Fed can afford to continue its wait-and-see stance.

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Economic Calendar

Thursday (May 2)

  • 2:00 German Retail Sales. Estimate -0.5%. Actual -0.2%
  • 3:55 German Final Manufacturing PMI. Estimate 44.5. Actual 44.4
  • 4:00 Eurozone Final Manufacturing PMI. Estimate 47.8. Actual 47.9

Friday (May 3)

  • 5:00 Eurozone CPI Flash Estimate. Estimate 1.6%
  • 5:00 Eurozone Core CPI Flash Estimate. Estimate 1.0%

*All release times are DST

*Key events are in bold

DAX, Thursday, May 2 at 9:40 DST

Previous Close: 12,344 Open: 12,353 Low: 12,303 High: 12,303 Close: 12,363

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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.