DAX – Wall street gains fails to boost DAX, Fed rate decision next

The DAX index has ticked lower in the Wednesday session. Currently, the DAX is trading at 11,558, down 0.18% on the day. On the release front, Germany’s trade surplus dropped to 17.6 billion, shy of the estimate of 18.2 billion. In the U.S., the Federal Reserve winds up its policy meeting and releases a policy statement.

Wall Street reacted with relief on Wednesday, after the conclusion of the U.S midterm elections. Major indices were up by about 2 percent, as the uncertainty over the election is over and the slugfest ended up as a split-decision. Had the Democrats taken back both houses of Congress, Trump would have been a lame duck for the next two years, and he would have had great difficulty passing any further market-friendly reforms. After a dismal October for global equity markets, investors are hoping that the positive start to November continues.

Are Rome and Brussels headed for a nasty collision? The crisis over the Italian budget shows no signs of easing anytime soon, and the fallout could weigh on the financial markets and on the euro, which is struggling to stay above the 1.14 level. The EU’s Economic Commissioner, Pierre Moscovici, has demanded that Rome revise its budget, which it says increases Italy’s debt and is in breach of EU rules. Moscovici has demanded a response from Rome by November 13 and has even threatened sanctions if the Italian government does not comply. On Wednesday, Italian Prime Minister Giuseppe Conte said that he had no intention of backing down over the budget. Italy is the third largest economy in the eurozone, and the financial markets and the euro could react negatively if Rome and Brussels cannot resolve the crisis.

ECB’s Draghi told Italy’s Tria to stick to fiscal discipline beyond EU rules

Commodities Weekly: Oil near 7-month lows on Iran waivers

Investors relieved as blue wave falls short

Economic Calendar

• 2:00 German Trade Balance. Estimate 18.2B. Actual 17.6B

• 4:00 ECB Economic Bulletin

• 5:00 EU Economic Forecasts

Previous Close: 11,579 Open: 11,631 Low: 11,540 High: 11,647 Close: 11,558