The DAX continues to show sharp swings this week. Currently, the DAX is at 11,932, down 0.49%. In economic news, first-quarter GDP reports for Germany and the eurozone matched their forecasts. On Thursday, the eurozone releases trade balance.
There was positive news from first-quarter GDP data in the eurozone. German Preliminary GDP improved to 0.4%, after a flat zero reading in the third quarter. In the eurozone, Flash GDP also climbed to 0.4%, up from 0.2% in Q1. Is the economic slowdown over in the eurozone? It’s too early to tell, but if key indicators follow suit and head upwards, sentiment towards the eurozone will improve and could boost the DAX.
The trade war between the U.S. and China has shaken global equity markets, and the DAX continues to show strong volatility. Investors remain nervous about the economic outlook, and the ZEW economic sentiment surveys for Germany and the eurozone dropped into negative territory. In the latest bout between the two super-economies, the U.S. slapped tariffs on $200 billion in Chinese products, and China responded with counter-tariffs on $60 billion in U.S. products. The markets are concerned that the U.S. could raise the ante by slapping tariffs on European vehicles which are produced in China. This could spell trouble for the massive European auto industry, as the tariffs would raise the cost of German cars sold in the U.S. This has triggered sharp losses for German automakers which are listed on the DAX. On Wednesday, BMW is down 1.27%, Daimler has fallen 1.20% and Volkswagen has slipped 3.62%.
