The DAX index has posted slight gains in the Friday session. Currently, the index is at 10,896, up 0.20% on the day. On the release front, German industrial production disappointed with a decline of 0.3%, shy of the estimate of 0.5%. In the eurozone, employment change and revised GDP for the third quarter both came in at 0.2%, matching their estimates. The U.S releases nonfarm payrolls, with the markets braced for a sharp drop to 200 thousand.
Global stock markets have dropped sharply this week. The DAX has plunged 5.55%, and dropped below the 11,000 level on Thursday, for the first time since December 2016. Bank and automaker shares were down sharply on Thursday, as investors continue to fret about the U.S-China trade war. There was some optimism early in the week after President Trump agreed to suspend further tariffs against China for 90 days. However, there are concerns that the two sides will not be able to close the gaps in their positions in just a few weeks. There was more bad news for the markets on Thursday, after a senior Chinese executive, Meng Wanzhou, was arrested in Vancouver for allegedly violating trade sanctions against Iran. Wanzhou faces extradition to the U.S., and China’s indignant response to the arrest could torpedo upcoming trade talks between the two countries. Even if the negotiations get off the ground, they promise to be difficult, which could mean more headwinds for the DAX.
After a tremendous run, the U.S labor market could be losing some steam. Employment data was softer than expected on Thursday. The November ADP nonfarm payrolls was forecast to drop, but the plunge was much sharper than expected. The indicator fell to 175 thousand, missing the estimate of 195 thousand. If the official nonfarm payroll report on Friday misses expectations, equity markets could respond with losses, adding more misery to a dismal week.
Economic Calendar
Friday (December 7)
2:00 German Industrial Production. Estimate 0.3%. Actual -0.5%
5:00 Eurozone Final Employment Change. Estimate 0.2%. Actual 0.2%
5:00 Eurozone Revised GDP. Estimate 0.2%. Actual 0.2%
8:30 US Nonfarm Employment Change. Estimate 200K
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.