DAX – Steady as German Consumer Climate Dips, Eurozone Consumer Confidence Next

The DAX Index has inched higher in the Thursday session. Currently, the DAX is at trading at 11,926.50. On the release front, GfK German Consumer Climate dipped to 9.8 points, shy of the forecast of 10.1 points. Later in the day, the eurozone releases consumer confidence data.  On Friday, Germany and the eurozone release Manufacturing PMIs, both of which should be treated as market-movers.

German consumer confidence lost ground for a second straight week, as the GfK indicator fell to 9.8, its lowest level since November 2016. The drop is largely a result of higher inflation, as consumers are more concerned that their purchasing power has been reduced. Still, the German economy, the largest in Europe, remains in solid shape, as the economy is expected to expand 1.5% in 2017. German data is regarded as a bellwether for the eurozone, so the markets will be keeping a close eye on the upcoming German Manufacturing PMI report.

With the Fed quarter-point hike behind us, what can we expect next from the central bank? Based on the Fed’s rate statement as well the dot plot, the Fed expects to raise rates two more times in 2017, for a total of three hikes this year. Earlier this week, Chicago Fed President Charles Evans echoed this sentiment, saying he expected the Fed to raise rates two more times this year. Although one could make a strong case that three rate hikes in 2017 would be impressive, the markets appear disappointed and would like four hikes, given the strong performance of the US economy. The Fed’s cautious approach over monetary policy, together with growing frustration over a lack of coherent economic policy from President Donald Trump, has soured investor sentiment, which is weighing on stock markets in both the US and Europe.

Economic Calendar

Thursday (March 23)

• 3:00 GfK German Consumer Climate. Estimate 10.1. Actual 9.8
• 5:00 ECB Economic Bulletin
• Tentative – ECB Long Term Refinancing Operation
• 10:00 Belgian NBB Business Climate. Estimate -0.6
• 11:00 Eurozone Consumer Confidence. Estimate -6

Upcoming Key Events

Friday (March 24)

• 4:30 German Flash Manufacturing PMI. Estimate 56.6
• 5:00 Eurozone Flash Manufacturing PMI. Estimate 55.6

*All release times are EST

*Key events are in bold

DAX for Thursday, March 23, 2017

DAX, March 23 at 5:30 EST

Open: 11,941.75 High: 11,928.25 Low: 11,894.50 Close: 11,926.50

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