The DAX index has posted gains in the Wednesday session. Currently, the DAX is trading at 12,668.50, up 0.50% on the day. On the release front, there are no major eurozone events on the schedule. On Thursday, Germany releases Preliminary CPI, which is expected to remain unchanged at 0.1%. The US will release Final GDP for the second quarter, with a forecast of a 3.0% gain.
On Tuesday, German industrial giant Siemens AG announced that it would merge rail operations with Alstom SA, a French train manufacturer. The merger is aimed as a response to growing competition in the rail transport sector, particularly from the Chinese state-owned railroad, CRRC. The merger still needs to be approved by regulators, but is already being hailed as an important deal which will strengthen economic ties between France and Germany, the two largest economies in the eurozone. Siemens is listed on the DAX 30, and its shares have jumped 2.2 percent in Wednesday trade.
ECB President Mario Draghi was careful not to make headlines on Monday, in his testimony before the European Parliament Economic and Monetary Affairs Committee. Draghi acknowledged that there was uncertainty regarding the inflation outlook, adding that recent volatility in the exchange rate would require monitoring. Draghi remains committed to the ECB’s loose monetary policy, saying that “ample” accommodation is still needed in order to raise inflation levels. Some policymakers have come out in favor of tightening monetary policy, with the eurozone economy continuing to grow and unemployment falling. However, inflation remains well below the ECB target of just below 2 percent. Draghi told lawmakers that he is confident that the inflation target will be met, but that would require avoiding any hasty changes to current monetary policy and declared that the ECB would remain “patient and persistent”.
