The DAX has posted gains in the Wednesday session. Currently, the DAX is at 12,818 up 0.25% on the day. In economic news, there is just one event on the schedule. Eurozone Retail PMI improved to 51.7 points, pointing to weak expansion. On Tuesday, Germany releases Factory Orders and the eurozone publishes Revised GDP.
The eurozone economy has been performing well and inflation continues to move higher, raising the question of what’s next for the ECB stimulus program. The ECB currently buys EUR 30 billion each month, and the scheme is scheduled to end in September. The bank has extended the program in the past, but stronger economic conditions have strengthened the case to finally end stimulus. The ECB has not formally discussed the issue, leaving the markets to hunt for any clues about the bank’s plans. On Wednesday, ECB chief Peter Praet said that the ECB would commence discussing the issue next week, when the Governing Council meets in Riga, Latvia. Many policymakers favor a gradual reduction in stimulus over several months, rather than completely turning off the tap in September. If the ECB makes any announcements regarding further tapering, we could see some volatility from European the stock markets.
The on-again-off-again Korea nuclear summit is back on, complete with a starting time. The much-heralded meeting between President Trump and President Kim Jong-un will take place in Singapore on June 12, at 9:00 AM sharp. The summit will mark the face ever face-to-face meeting between leaders of the U.S and North Korea, but Trump has tried to lower expectations, saying that he didn’t expect the sides to sign an agreement. Rather, the meeting would mark the start of a process. North Korea is unlikely to agree to denuclearization, but the fact that the two sides are talking is likely to continue boosting the stock markets.
Economic Calendar
Wednesday (June 6)
- 4:10 Eurozone Retail PMI. Actual 51.7
Thursday (June 7)
- 2:00 German Factory Orders. Estimate 0.7%
- 5:00 Eurozone Revised GDP. Estimate 0.4%
*All release times are DST
*Key events are in bold
DAX, Wednesday, June 6 at 6:50 DST
Previous Close: 12,787 Open: 12,803 Low: 12,767 High: 12,873 Close: 12,818
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