DAX dips as Broadcom slashes revenue forecast

The DAX has posted considerable losses on Friday. Currently, the index is at 12,096, down 0.60% on the day. On the fundamentals front, there are no major German or eurozone events. In the U.S., today’s highlights are the May retail sales reports. Core retail sales are projected to climb to 0.5%, after a weak gain of 0.1% a month earlier. Retail sales are expected to rebound to 0.7%, after a reading of -0.2% in April. The week winds up with the UoM Consumer Sentiment report, which is expected to fall to 98.1, after an outstanding reading of 102.4 in the previous release.

Broadcom, the giant Singapore chipmaker, has dragged down European stocks on Friday. Broadcom has forecast a hit of some $2 billion to revenue, another casualty in the bitter trade war between the U.S. and China. The negative news has hurt technology stocks, and the tecDAX, which tracks the 30 largest technology companies in Germany, is down 1.1% on Friday. The DAX is also trading lower.

All eyes are on U.S. consumer spending data. Inflation numbers for May were soft, but the markets are counting on better news from consumer spending data. Retail sales and core retail sales are expected to rebound in May, and these numbers could play a crucial role in the Federal Reserve’s forward guidance for rates. The markets are prepared for a rate cut, possibly two, in the second half of the year. The CME Group has set the odds of a July cut at 62% and another cut in September at 55%. Lower interest rates make the U.S. dollar less attractive to investors, so some headwinds could be ahead for the greenback.

Gold gains as Fed rate cut expectations provide support

USD/CAD Canadian Dollar Rises on Oil Surge After Attacks

Economic Calendar

Friday (June 14)

  • 8:30 US Core Retail Sales. Estimate 0.5%
  • 8:30 US Retail Sales. Estimate 0.7%
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 98.1

*All release times are DST

*Key events are in bold

DAX, Thursday, June 14 at 5:40 DST

Previous Close: 12,169 Open: 12,140 Low: 12,082 High: 12,144 Close: 12,096

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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.