The DAX index has posted considerable gains in the Wednesday session. Currently, the DAX is trading at 12,280, up 0.48% on the day. In economic news, German Final CPI posted a gain of 0.5%, matching the forecast. This was a strong improvement from the previous reading of -0.7%. In the eurozone, Employment Change edged lower to 0.3%, matching the estimate. Industrial Production declined -1.0%, missing the forecast of -0.4%. ECB President Mario Draghi spoke at an ECB conference in Frankfurt.
Eurozone manufacturing indicators for January are pointing to contraction. Eurozone Industrial Change declined 1.0% in January, its sharpest drop since December 2016. The estimate stood at -0.4%. Last week, German numbers disappointed. Factory Orders in January plunged 3.9%, worse than the estimate of -1.9%. This marked the second decline in the past three months. This was followed by a decline of 0.1% from Industrial Production, marking a second straight decline. The reading was well off the forecast of 0.6%.
The latest numbers are somewhat surprising as the German economy remains very strong, and has led the way as eurozone economy continues to expand. German Chancellor Angela Merkel was elected to a fourth term on Wednesday, as Germany finally has a government in place, after an inconclusive election in September. However, Merkel will have her work cut out for her in what could be her last stint as leader of the eurozone’s largest economy. Merkel’s stature has diminished after a poor election, and she will preside over a fractured coalition. The vote in the German parliament was 364 to 315. Merkel was forced to give the SDP the finance and foreign ministry portfolios, so we can expect the new government to be more supportive of eurozone integration, including assistance for weaker eurozone members.
Economic Calendar
Wednesday (March 14)
- 3:00 German Final CPI. Estimate 0.5%. Actual 0.5%
- 4:00 ECB President Draghi Speaks
- 6:00 Eurozone Employment Change. Estimate 0.3%. Actual 0.3%
- 6:00 Eurozone Industrial Production. Estimate -0.4%. Actual -1.0%
- Tentative – German 30-year Bond Auction
*All release times are EST
*Key events are in bold
DAX, Wednesday, March 14 at 7:50 EDT
Prev. Close: 12,221 Open: 12,216 High: 12,273 Low: 12,201 Close: 12,280
