DAX higher as progress made in U.S-China trade talks

Kenny Fisher MarketPulse

The DAX index continues to point upwards and has posted gains for a seventh straight session. On Thursday, the DAX is at 12,201, up 0.40% on the day. It’s been all ‘April flowers’ for the DAX, which has soared 5.9% this month. In economic news, German manufacturing PMI dropped to 44.5 in March, shy of the estimate of 45.2 points. The all-eurozone manufacturing PMI posted a decline of 47.8, missing the forecast of 48.1 points. The services numbers were stronger, with German services PMI climbing to 55.6 and the eurozone indicator coming in at 52.5 points.

There were no surprises from the German and eurozone PMIs for March, with bleak news from the manufacturing front. The sector continues to post declines, as the global trade war has reduced demand for German and eurozone exports, and taken a toll on the auto industry. German manufacturing PMI has slowed for nine successive months, and the worrisome trend shows no signs of changing until the U.S and China hammer out a trade agreement. The services sector, which is more reflective of domestic demand, is in better shape and continues to indicate expansion.

Eurozone inflation is steady, but remains well below the ECB target of 2.0 percent. The eurozone annual inflation rate edged lower to 1.4% in March, compared to 1.5% in February. Low inflation means that the ECB is not under pressure to raise interest rates. After last week’s policy meeting, Mario Draghi noted that the economic outlook for the eurozone remains weak. With no interest hikes in sight and a sluggish eurozone economy, investors may lose interest in the euro and opt for equities instead.

Economic Calendar

Thursday (April 18)

2:00 German PPI. Estimate 0.2%. Actual -0.1%
3:30 German Flash Manufacturing PMI. Estimate 45.2. Actual 44.5
3:30 German Flash Services PMI. Estimate 55.0. Actual 55.6
4:00 Eurozone Flash Manufacturing PMI. Estimate 48.1. Actual 47.8
4:00 Eurozone Flash Services PMI. Estimate 53.1. Actual 52.5

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.