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