German and French stock markets have lost ground in the Wednesday session. Currently, the DAX is trading at 12,277 points, down 1.00% on the day. The CAC index is also in the red, with losses of 0.72% on the day. On the release front, there are no major indicators in the eurozone. ECB President Mario Draghi is speaking at an event in Frankfurt. In the US, the Federal Reserve publishes the minutes of its March rate meeting. On Thursday, the ECB releases the minutes of its March rate meeting.
European stock markets have been volatile this week. The markets reacted positively as the trade battle between the US and China took a pause, after the two economic giants slapped each other with tariffs. On Sunday, US officials sought to lower the temperature on the Sunday television programs, and Treasury Secretary Steve Mnuchin said that he doesn’t “expect there will be a trade war.” This was followed by a calm message from Chinese President Xi Jimping on Tuesday. Xi was speaking at a development conference in China, and promised to lower tariffs on vehicle imports into China. However, sentiment has turned negative on Wednesday, as the rhetoric between the US and Russia has ratcheted higher. Syrian forces allegedly used chemical weapons against rebel positions last week, and a UN Security Council meeting ended inconclusively after Russia cast a veto on a US proposal to prove the attack. US President Trump has warned that a US response is on the way, and Russia has countered that it will respond to any US move. If Trump makes good on his promise, investors could lose their risk appetite and the markets could spiral downwards.
The markets are keeping a close eye on the release of the FOMC minutes. The minutes could provide the markets with some insights regarding the Federal Reserve’s monetary policy for this year. Will the Fed press the rate trigger three times this year, or four? The current Fed forecast calls for three rate hikes, but this could be revised upwards if inflation rises. If the FOMC minutes point to a hawkish stance from policymakers, this could send US markets lower, which could lead to losses for European markets as well.
China's Dialed Back Trade War Rhetoric Music To Markets' Ears
Syria Risks Offset Trade Truce
Economic Fundamentals
- 5:34 German 30-year Bond Auction. Actual 1.12%
- 7:00 ECB President Mario Draghi Speaks
Thursday (April 12)
- 15:00 Eurozone Industrial Production. Estimate 0.1%
- 7:30 ECB Monetary Policy Meeting Accounts
- 12:00 German Buba President Weidmann Speaks
*All release times are DST
*Key events are in bold
DAX, Wednesday, April 11 at 8:30 EDT
Prev. Close: 12,397 Open: 12,370 Low: 12,259 High: 12,391 Close: 12,277
