By Kenny Fisher
The DAX Index is steady in the Wednesday session, after considerable losses on Tuesday. Currently, the DAX is at 11,896.50. On the release front, there are no major economic indicators out of Europe. On Thursday, Germany publishes GfK Consumer Climate and the Eurozone releases Consumer Confidence.
European and US stock markets headed south on Tuesday, as investors have given a thumb-downs to the Federal Reserve, which has indicated that it plans to raise rates just two more times in 2017. This was apparent in the Fed’s dot point plot as well as last week’s rate statement. On Monday, FOMC member Charles Evans reiterated this stance, saying that he expected another two more rate hikes this year. Although three rate hikes in 2017 would be no mean feat, the markets would prefer four hikes, given the strong performance of the US economy. The Fed’s cautious approach sent the DAX lower on Tuesday, but the euro took the opposite direction, punching above the 1.08 line and hitting 7-week highs against the dollar. With a lack of key fundamentals this week, the markets are focusing on comments from FOMC members who will be speaking this week, including Fed Chair Janet Yellen on Thursday.
In the Netherlands, Prime Minister Mark Rutte comfortably won last week’s election, defeating far-right candidate Geert Wilders, a euro-sceptic. Next stop on the election train is France, which holds presidential elections next month. Polls have far rightist Marine Le Pen and centrist Emmanuel Macron running neck-and-neck in the first round of the presidential election on April 23. Still, Macron is expected to win in the second-round vote in May. In a highly-anticipated television debate on Monday, Macron and Le Pen had a chance to hawk their wares, and a survey found that Macron won the debate. Le Pen, leader of the far-right, has pledged to take France out of the eurozone and hold a referendum on EU membership. Macron’s strong showing in the debate has improved market sentiment and helped boost the euro on Tuesday. France boasts the number two economy in the eurozone, so we can expect more volatility from the euro as we get closer to Election Day.
Wednesday (March 22)
- 5:00 Eurozone Current Account. Estimate 29.3B. Actual 24.1B
- Tentative – German 10-y Bond Auction
Thursday (March 23)
- 3:00 GfK German Consumer Climate. Estimate 10.1
- 5:00 ECB Economic Bulletin
- Tentative – Long Term Refinancing Operation
- 10:00 Belgian NBB Business Climate. Estimate -0.6
- 11:00 Eurozone Consumer Confidence. Estimate -6
*All release times are EST
*Key events are in bold
DAX for Wednesday, March 22, 2017
DAX, March 22 at 6:55 EST
Open: 11,865.00 High: 11,900.50 Low: 11,849.50 Close: 11,896.50
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