Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Bank Shares Drag DAX To 4-Week Low

Published 10/08/2018, 07:38 AM
Updated 03/05/2019, 07:15 AM

The DAX index has posted sharp losses in the Monday session. Currently, the index is at 11,993 points, down 0.93% on the day. There are no key events in Germany or the eurozone. German Industrial Production declined 0.3%, missing the estimate of 0.4%. The indicator has now declined four times in the past five months. In the eurozone, Sentix Investor Confidence dropped to 11.4 points, matching the estimate. On Tuesday, Germany releases trade balance.

High yields on U.S treasury bonds continue to weigh on global equity markets. On Thursday, the yield on 10-year treasury notes hit 3.23%, the highest yield since May 2011. Eurozone bond yields have also risen, putting pressure on European stock markets. On Monday, the DAX has dropped to its lowest level since October 12. Bank shares continue to struggle and are down sharply on Monday. Commerzbank (DE:CBKG) has plunged 5.98% and Deutsche Bank (DE:DBKGn) has dropped 2.38%.

Another factor weighing on European stock markets is the crisis over the controversial Italian budget. Last week, the new populist government proposed a controversial budget which increases spending, lowers taxes and set the budget deficit at 2.4% of GDP for the next three years. Italy has a massive debt, and the European Union doesn’t want Rome to expand the current deficit, which stands at 1.6% of GDP. The populist Italian government has tried to lower the flames, and last week said that the budget deficit could be lowered in 2020 and 2021. Still, the budget remains a sore point for the EU, and the risk appetite could slide if the EU and Italy remain at loggerheads over Italy’s fiscal policy. The budget must first be approved by Italy’s parliament and then by the European Commission, so this crisis could continue for some time.

Italy and China drag markets lower

Economic Calendar

Monday (October 8)

  • 2:00 German Industrial Production. Estimate +0.4%. Actual -0.3%
  • 4:30 Eurozone Sentix Investor Confidence. Estimate 11.4. Actual 11.4

Tuesday (October 9)

  • 2:00 German Trade Balance. Estimate 15.9B

*All release times are DST

*Key events are in bold

DAX, Monday, October 8 at 7:15 DST

Previous Close: 12,111 Open: 12,067 Low: 11,988 High: 12,070 Close: 11,993

DAX Chart

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.