The DAX index remains subdued in the Wednesday session after showing little movement on Tuesday. Currently, the DAX is at 12,916 points, up 0.03% on the day. It’s a quiet day on the release front, with no major indicators in the eurozone. On Wednesday, the ECB releases an economic bulletin, and the US will publish consumer inflation reports.
Germany has posted some soft numbers recently, which could have major ramifications for ECB fiscal policy. The ECB cut its stimulus package at the start of the year from EUR 60 billion to 30 billion, while at the same time it extended the program to September. However, soft eurozone numbers, especially in Germany, have raised concerns that the bank may decide to again extend stimulus into 2019. German Factory Orders posted a second decline in the past three months, and the most recent PMIs in the services and manufacturing sectors also headed lower. On Tuesday, German indicators bounced back after a weak start to the week. Industrial Production climbed 1.0%, beating the estimate of 0.8% and ending a nasty streak of three straight declines. As well, Germany posted a trade surplus of EUR 22.0 billion, easily beating the estimate of EUR 19.9 billion. This marked a 4-month high.
European stock markets are showing a muted reaction to President Trump’s dramatic speech on Tuesday. Trump announced that the US would withdraw from the Iran nuclear deal. Trump blasted the agreement and said that the US would impose stiff sanctions on Iran. However, Britain, France and Germany have said they plan to remain in the deal, and will be holding a high-level meeting with Iranian leaders on how the agreement can be salvaged. With the US acknowledging that the White House does not have a ‘Plan B’, it’s unclear what happens next. Meanwhile, tensions between Israel and Iran remain high, after several Israeli airstrikes in Syria caused Iranian casualties. Any confrontation between the two could shake up the markets.
Economic Fundamentals
Wednesday (May 9)
- 2:45 French Industrial Production. Estimate 0.4%. Actual -0.4%
- 4:00 Italian Retail Sales. Estimate 0.1%. Actual -0.2%
- Tentative – German 30-year Bund Auction
- 8:30 US PPI. Estimate 0.2%
- 8:30 US Core PPI. Estimate 0.2%
- 10:00 US Final Wholesale Inventories. Estimate 0.6%
- 10:30 US Crude Oil Inventories. Estimate -0.2M
- 13:01 US 10-year Bond Auction
Thursday (May 10)
- 4:00 ECB Economic Bulletin
- 8:30 US CPI. Estimate 0.3%
- 8:30 US Core CPI. Estimate 0.2%
- 8:30 US Unemployment Claims. Estimate 219K
*All release times are DST
*Key events are in bold
DAX, Wednesday, May 9 at 6:40 DST
Prev. Close: 12,912 Open: 12,917 Low: 12,900 High: 12,962 Close: 12,916
