The DAX index has dipped lower on Thursday. Currently, the DAX is at 12,282, down 0.23% on the day. There are no German or eurozone events on the schedule. On Friday, the U.S. releases the initial reading for first-quarter GDP, with an estimate of 2.2%.
Recent German numbers have been lukewarm, as the eurozone’s largest economy is experiencing a slowdown. This has weighed on the euro, but the blue-chip DAX index shows no signs of slowing down. The index has soared in April, with gains of 6.7%. This is on track for the highest monthly gain since December 2016. On Wednesday, German Ifo Business Climate dipped to 99.2, shy of the estimate of 99.6 points. The indicator has softened since 2018, as weaker economic conditions have weighed on business confidence. Nonetheless, the DAX posted strong gains on Wednesday.
The ECB released its economic bulletin on Wednesday, which provided a somber assessment of the eurozone economy. The ECB took note of the global trade war and the downside risk to the eurozone. The report noted that large negative effects could materialise if “trade tensions were to escalate further. Uncertainty related to protectionism is weighing on economic sentiment and it may raise further, potentially eroding confidence and affecting the euro area and the global economy more significantly.”
The global trade war, which has included new tariffs between the EU and the U.S., have damaged the German and eurozone manufacturing sectors. Manufacturing PMIs are mired in negative territory, pointing to a continuing decline in manufacturing.
