The DAX index has dropped sharply in the Wednesday session. Currently, the DAX is at 12,971, down 1.50% on the day. On the release front, German and eurozone PMIs missed expectations in the manufacturing and services sectors. In the US, the key event is the release of the Federal Reserve minutes from the May policy meeting. On Thursday, Germany releases Final GDP and GfK Consumer Climate, and the ECB will publish the minutes of its April policy meeting.

Asian markets are seeing red on Wednesday after US President Trump sounded skeptical over progress in trade talks between the US and China. On Tuesday, Trump said that he was ‘not really’ satisfied with the negotiations. Trump’s comments have confused the markets, as Treasury Secretary Steven Mnuchin declared on the weekend that the trade spat was ‘on hold’. Investor risk appetite has also waned as there is uncertainty whether North Korean leader Kim Jong-un will meet with President Trump next month.

Weak PMI data in May has sent the euro lower in the Wednesday session, as the currency dipped below the 1.17 line for the first time since mid-November. Investors are particularly concerned that both German and eurozone manufacturing PMIs dropped for a fifth straight month. German Manufacturing PMI posted its weakest gain in 16 months, while the eurozone indicator posted its worst reading in 18 months. These numbers, while certainly disappointing, should not cause any alarm, as the PMIs continue to indicate expansion in the services and manufacturing sectors. Still, the fact that growth was softer than expected could give ECB policymakers reason to re-evaluate the planned wind-up of its stimulus program in September.

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Economic Fundamentals

Wednesday (May 23)

  • 3:30 German Flash Manufacturing PMI. Estimate 57.9. Actual 56.8
  • 3:30 German Flash Services PMI. Estimate 53.1. Actual 52.1
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 56.1. Actual 55.5
  • 4:00 Eurozone Flash Services PMI. Estimate 54.7. Actual 53.9
  • 10:00 Eurozone Consumer Confidence. Estimate 0
  • 14:00 US FOMC Meeting Minutes

Thursday (May 24)

  • 2:00 German Final GDP. Estimate 0.3%
  • 2:00 German GfK Consumer Climate. Estimate 10.8
  • 4:00 ECB Financial Stability Review
  • 7:30 ECB Monetary Policy Meeting Accounts

*All release times are DST

*Key events are in bold


DAX, Wednesday, May 23 at 6:35 DST

Prev. Close: 13,169 Open: 13,134 Low: 12,956 High: 13,149 Close: 12,971

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