The DAX has posted considerable gains in the Monday session. Currently, the index is at 12,078, up 0.56% on the day. On the release front, there are no German or eurozone events. On Tuesday, Germany releases Ifo Business Climate.
The votes have been tallied in the European parliamentary elections, as over 200 million voters went to the polls in 28 EU countries, including the U.K. The results were dramatic, as far-right parties across Europe made gains, at the expense of centrist parties. In France, Marine Le Pen’s National Rally party came in first, handing a stinging defeat to President Macron. In Germany, Chancellor Angela Merkel’s conservatives lost ground, and voters in the U.K sent a strong message to Labor and the Conservatives, as Nigel Farage’s Brexit party won the most seats. The ramifications are already being felt, as Greek Prime Minister Alexis Tsipras has called a general election after his Syriza party fared poorly in the EU elections. The euro has not shown much movement on Monday, but could face headwinds as investors digest the results.
Trade tensions between the U.S. and China escalated last week, which soured risk appetite. On Thursday, the DAX plunged 1.8%, its sharpest one-day drop since early February. A trade deal between the two super-economies has not materialized, despite assurances from U.S. officials that substantial progress has been made. China has reacted angrily to U.S. sanctions on Huawei and has suspended trade talks with the U.S. Although negotiations will likely resume at some point, risk apprehension remains high, and this could lead to further headwinds for the DAX.
Markets in holiday mood
MEU elections not so bad for EUR or GBP
Economic Calendar
Monday (May 27)
- There are no events on the schedule
Tuesday (May 28)
- 2:00 German GfK Consumer Climate. Estimate 10.4
Previous Close: 12,011 Open: 12,082 Low: 12,050 High: 12,122 Close: 12,078
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