DAX Punches Above 12,000 as Investors Await Next Trump Move

The DAX Index has edged upwards on Tuesday, as the DAX trades at 12,069.50. It’s a quiet day on the release front, with no eurozone events on the schedule. On Wednesday, Germany releases Import Prices, which is expected to dip to 0.4%.

The DAX has pushed above the symbolic 12,000 level this week, bolstered by an excellent reading from German Ifo Business Climate, which rose to 112. 3 points. This marked its highest level since July 2011. The release underscores high optimism in the business sector, despite rumblings of protectionism from the US and the uncertainty in Europe over the imminent Brexit negotiations. Germany, the largest economy in Europe, continues to post strong numbers, which has been good news for the eurozone economy. Last week’s PMIs pointed to expansion in the manufacturing and service sectors. German and eurozone Manufacturing PMIs both beat their estimates and hit their highest levels since 2011. Later this week, Germany releases key indicators, including CPI, retail sales and unemployment claims. One soft spot in the economy, however, is consumer confidence. GfK German Consumer Climate lost ground for a second straight month, as the indicator dropped to 9.8 in March, its lowest level since November 2016. Eurozone Consumer Confidence remains weak, as the indicator posted a decline of -5 in March, almost unchanged from a month earlier. These soft numbers are largely a result of higher inflation, as consumers are concerned about their reduced purchasing power. If inflation levels head higher, consumers could respond by curtailing spending, which could hamper economic growth.

Donald Trump is used to getting his way in the private sector and on reality TV, but he had to swallow a bitter pill last week as he suffered his first major setback as president. His bill to replace the Affordable Care Act was pulled before it even went to a vote on the House floor, despite the Republicans enjoying a majority in Congress. This bruising defeat has sent the US dollar sharply lower, and sent market jitters higher. Trump’s administration has stumbled out of the starting gate, and after more than two months in office, he has yet to provide any details over even an outline of economic policy. The inquiry into the Trump administration’s links with Russia is gathering steam, and is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but he has his work cut out, trying to convince a skeptical Congress and general public that he can deliver the goods and pass new, effective legislation.

Economic Calendar

Tuesday (March 28)

• There are no eurozone events on the schedule

Upcoming Key Events

Wednesday (March 29)

• 2:00 German Import Prices. Estimate 0.4%

*All release times are EST

*Key events are in bold

DAX, March 28 at 6:15 EST

Open: 12,056.25 High: 12,077.00 Low: 12,044.00 Close: 12,069.50

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