The DAX index has started the week with strong gains. In the Monday session, the DAX is at 13,033.00, up 1.33% from Friday’s close. On the release front, Eurozone Sentix Investor Confidence dropped to 31.1, short of the estimate of 32.3 points. Eurozone PPI gained 0.4%, matching the forecast. On Tuesday, Germany and the eurozone release services PMIs, and the eurozone will also release retail sales.
Are the Brexit talks back on track? Prime Minister May and European Commission President Jean-Claude Juckner meet later on Monday in Brussels, hoping to move closer to wrapping up the first phase of the talks. Britain wants to move to talk trade with the Europeans, and has given in on EU demands of a divorce bill around EUR 50 billion. Still, two thorny non-trade issues have yet to be resolved. One is the border between the UK (Northern Ireland) and Ireland, which is a member of the EU. The UK will clearly not remain in a customs union with the EU, but Ireland is insistent that there not be a hard border. The second issue is whether the European Court of Justice will have a role protecting European citizens in the UK. The EU is in favor of a role for the court, while many British lawmakers feel that such a move would impinge on British sovereignty.
It was a great end to the week for President Trump, whose tax reform proposal is moving through Congress at breakneck speed. After a false start on Friday, the US Senate passed a tax reform bill on the weekend. The 51-49 was razor thin, vote was a squeaker, with 51 Republicans voting yes, against 48 Democrats and 1 Republican. Republican lawmakers hope to have Trump sign a bill before the end of the year. This would mark the first major piece of legislation that Trump can hang his hat on since becoming president. The Senate and House must now reconcile their two bills, and the new uniform bill will then have be passed in both houses. Investors are pleased with the bill, and the US dollar has responded to the vote with broad gains.
Economic Calendar
Monday (December 4)
- 4:30 Eurozone Sentix Investor Confidence. Estimate 32.3. Actual 31.1
- 5:00 Eurozone PPI. Estimate 0.4%. Actual 0.4%
Tuesday (December 5)
- 3:55 German Final Services PMI. Estimate 54.9
- 4:00 Eurozone Final Services PMI. Estimate 56.2
- 5:00 Eurozone Retail Sales. Estimate -0.6%
*All release times are GMT
*Key events are in bold
DAX, Monday, December 4 at 6:45 EDT
Open: 13,048.50 High: 13,056.00 Low: 12,975.00 Close: 13,033.00
