The DAX has posted losses in the Tuesday session. Currently, the index is at 12,042, down 0.24% on the day. On the release front, German GfK Consumer Climate slipped to 10.1, short of the estimate of 10.4 points. On Wednesday, Germany releases unemployment change and the ECB posts its semi-annual financial stability review.
The ongoing trade war between the U.S. and China shows no signs of ending anytime soon, and this has weighed on investor risk appetite. A weak consumer confidence release out of Germany hasn’t helped matters. Consumer confidence took a hit in May, as GfK Consumer Climate slipped to 10.1 points, down from 10.4 in April. This was the lowest score since April 2017. With the escalation in U.S-China trade tensions, there is no end in sight to the tariffs which have been imposed on European goods, which has dampened consumer confidence. We’ll get a look at the health of consumer spending on Thursday, when Germany releases retail sales. After a decline of 0.2% in April, the markets are expecting a rebound in May, with a forecast of 0.4%.
Investors are digesting the results of the European parliament elections. Across Europe, Far-right parties across Europe made gains at the expense of centrist parties, as voters vented their frustration by supporting nationalist and environmentalist 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.
