The DAX index is trading sideways in the Friday session. Currently, the index is at 11,930, down 0.21% on the day. On the release front, German data disappointed. Industrial Production declined 1.1%, well short of the estimate of +0.2%. As well, Germany’s trade surplus narrowed to EUR 15.8 billion, shy of the forecast of 19.1 billion. In the eurozone, Revised GDP posted a 0.4% gain for a second straight month, matching the forecast. In the U.S, nonfarm payrolls are expected to rise to 193 thousand.
It’s been a dismal week for the DAX, which is down 3.5 percent. Investors have responded negatively to weak German data and gloomy prospect of worsening trade tensions between the U.S and its trading partners, notably China. German manufacturing data has been unexpectedly soft. Industrial Production came in at -1.1%, its weakest reading in five months. Earlier in the week, factory orders declined and Final Manufacturing PMI softened. New orders for German manufactured goods are down in the eurozone as well as elsewhere, which could negatively affect the German economy.
The U.S-China trade spat has been in the headlines for months, with the U.S slapping tariffs on China and the latter responding in kind. Will President Trump ratchet up the trade war between the world’s two largest economies? Trump has threatened to impose tariffs on $200 billion worth of Chinese tariffs, and the time period for public consultations ended on Thursday, which means that Trump is free to announce another round of tariffs at any time. The dollar has benefited from the global trade war, and further tariffs against China could boost the greenback against its major rivals, including the euro.
Friday (September 7)
- 2:00 German Industrial Production. Estimate +0.2%. Actual -1.1%
- 2:00 German Trade Balance. Estimate 19.1B. Actual 15.8B
- 5:00 Eurozone Revised GDP. Estimate 0.4%
- All Day – Eurogroup Meetings
- 8:30 US Nonfarm Employment Change. Estimate 191K
Friday (September 7)
- 2:00 German Industrial Production. Estimate 0.2%
- 2:00 German Trade Balance. Estimate 19.1B
- 5:00 Eurozone Revised GDP. Estimate 0.4%
- All Day – Eurogroup Meetings
- 8:30 US Nonfarm Employment Change. Estimate 193K
*Key events are in bold
DAX, Friday, September 7 at 6:40 DST
Previous Close: 11,955 Open: 11,964 Low: 11,918 High: 11,990 Close: 11,930