DAX climbs to 4-week high as Eurozone CPI rises to 2 percent

The DAX index has posted considerable gains in the Wednesday session. Currently, the DAX is at 12,750 up 0.71% on the day. On the release front, there are no major German or eurozone events.

A milestone was reached on Thursday, as Eurozone Final CPI reached the 2.0% threshold in the June release. On an annualized basis, Final CPI also came in at 2.0%. This marks the highest level since February 2017. As the ECB prepares to wind up its asset-purchase program, the markets are looking for clues about a possible rate hike. Such a move would likely have a significant impact on the markets, as the ECB last raised rates back in 2011. If inflation levels continue to rise, there will be more pressure on the ECB to consider a rate hike sooner rather than later.

With global protectionist winds getting stronger by the week, Japan and the EU signed a free trade agreement on Tuesday. At the signing ceremony, Prime Minister Shinzo Abe and European Council head Donald Tusk said that the deal is a response to growing concerns about protectionism. The agreement will eliminate most tariffs between the EU and Japan, and will be particularly beneficial for Japanese car makers and European food producers. No less important, the agreement marks the largest free trade agreement in the world, as the EU and Japan cover about one-third of global GDP and some 600 million people.

Economic Calendar

Wednesday (July 18)

• 5:00 Eurozone Final CPI. Estimate 2.0%
• 5:00 Eurozone Final Core CPI. Estimate 1.0%
• Tentative – German 30-year Bond Auction

*All release times are DST

*Key events are in bold

DAX, Wednesday, July 18 at 7:05 DST

Previous Close: 12,661 Open: 12,725 Low: 12,713 High: 12,779 Close: 12,745

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.