DAX Slides As Trump Slaps Tariffs On China
MarketPulse | Jun 18, 2018 07:41AM ET
The DAX index has started the week with sharp losses, continuing the downward trend seen on Friday. Currently, the DAX is at 12,834, down 1.35% on the day. On the release front, there are no German or eurozone indicators. The highlight of the day is the opening of the ECB Forum, which kicks off with a speech from ECB President Mario Draghi. On Tuesday, Draghi will participate in a panel discussion. As well, the eurozone releases current account, with the surplus expected to drop to EUR 30.3 billion.
It’s been a roller-coaster ride for the DAX, which soared on Thursday, but quickly reversed directions. Investor risk appetite has waned, after US President Trump imposed further tariffs on some $50 billion of Chinese products. China has promised to retaliate against US imports, as trade ties between the world’s two largest economies continue to deteriorate. With the US recently slapping tariffs on the EU and the NAFTA talks in stall mode, its no wonder that investor anxiety has risen. If the trade war between the US and its partners continues to escalate, traders can expect global equities to continue to lose ground.
The DAX jumped 1.6% on Thursday, but has since given up most of these gains. The markets jumped after the ECB policy meeting, when the ECB said that it had no intention of raising interest rates prior to the second half of 2019. The ECB pledged to taper its bond-purchase program to EUR 15 billion/mth, in October, down from the current pace of EUR 30 billion/mth. The program will wind up at the end of the year. However, investors detected a ‘dovish flavor’ to the announcement, as the ECB added that interest rates would remain steady “at least through the summer of 2019,” giving policymakers plenty of wiggle-room to delay any rate hikes. The markets were anticipating a rate hike shortly after the end of the bond-purchase program, so this announcement was a disappointment. ECB head Mario Draghi sounded dovish in his press conference, saying that the eurozone economy was facing “increasing uncertainty.” Draghi was likely referring to the G-7 meeting which ended in disarray as well as the election of a euro-skeptic government in Italy. The ECB also lowered its growth forecast for the eurozone to 2.1%, down from 2.4% earlier this year.
Monday (June 18)
- 6:00 German Buba Monthly Report
- 13:30 ECB President Mario Draghi Speaks
Tuesday (June 19)
- 4:00 ECB President Mario Draghi Speaks
- 4:00 Eurozone Current Account. Estimate 30.3B
*All release times are DST
*Key events are in bold
DAX, Monday, June 18 at 7:25 DST
Previous Close: 13,8010 Open: 12,955 Low: 13,824 High: 13,982 Close: 12,834
Get The News You Want
Original post
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.