The DAX index remains under pressure in the Tuesday session. Currently, the DAX is at 12,614, down 1.71% since the Monday close. On the release front, the ECB Forum kicks off with a speech from ECB President Mario Draghi. In the eurozone, the current account surplus narrowed for a third straight month, dropping to EUR 28.4 billion. This fell short of the estimate of EUR 30.3 billion. On Wednesday, Mario Draghi and Fed Chair Jerome Powell will participate in a panel at the European Forum. Germany will release the Producer Price Index.
It has been a rough start to the week for German stock markets, and the DAX index has lost 2.1% percent. Earlier on Tuesday, the DAX fell to its lowest level since May 31. Investors have reacted negatively to the escalating trade war between China and the U.S, as fears of global trade war have increased. The U.S announced a 25 percent tariff on $50 billion in Chinese goods on Friday. After China responded with an identical move on U.S. imports, President Trump has now threatened to impose 10 percent tariffs on some $200 billion in Chinese goods. Not surprisingly, China has threatened to retaliate to this latest move. Trump has vowed to take action on the $375 billion trade deficit that the U.S has with China, claiming that the latter is guilty of unfair trade practices. With the first of the U.S tariffs scheduled to take effect on July 6 and no signs that any side will blink first, the markets should be preparing for stormy weather ahead. It will be interesting to see if central bank heads Draghi and Powell address the tariff spat on Wednesday at the ECB Forum.
( UPDATE 1) World Cup effect weighing on volumes
Tuesday (June 19)
- 4:00 ECB President Mario Draghi Speaks
- 4:00 Eurozone Current Account. Estimate 30.3B. Actual 28.4B
Wednesday (June 20)
- 2:00 German PPI. Estimate 0.4%
- 9:30 ECB President Draghi Speaks
- 9:30 Fed Chair Powell Speaks
*All release times are DST
*Key events are in bold
DAX, Tuesday, June 19 at 7:30 DST
Previous Close: 12,834 Open: 12,678 Low: 12,593 High: 12,686 Close: 12,614
