The DAX Index has ticked lower in the Wednesday session, as the DAX trades at 12,194.25. On the release front, it’s another light day. The sole eurozone event is German Import Prices, which gained 0.7%. This beat the estimate of 0.4%. On Thursday, Germany releases Preliminary CPI and the US publishes Final GDP.
The DAX has moved higher this week, bolstered by a sparkling reading from German Ifo Business Climate in March. The indicator climbed to 112.3 points, its highest level since July 2011. The excellent release underscores high optimism in the business sector, despite rumblings of protectionism from the US and the uncertainty in Europe over the imminent Brexit negotiations. Stronger global demand has led to increased German exports, notably cars and machinery. Germany’s GDP expanded 1.6% in 2016, its highest rate since 2012. The economy has enjoyed a robust first quarter, and this has helped boost growth in the eurozone. Later this week, Germany releases key consumer and employment numbers, including CPI, retail sales and unemployment claims. Any unexpected readings could have a strong impact on the movement of EUR/USD.
President Donald Trump was on the wrong end of the rough-and tumble politics in Washington, as his bill to replace the Affordable Care Act was pulled before it even went to a vote. This was a humiliating setback for Trump, given that the Republicans enjoying a majority in Congress. The bruising defeat has sent the US dollar sharply lower and market jitters higher. Trump’s administration has stumbled out of the starting gate, and after more than two months in office, he has yet to provide any details over even an outline of economic policy. The inquiry into the Trump administration’s links with Russia is gathering steam, and is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but he has his work cut out, trying to convince a skeptical Congress and general public that he can deliver the goods and push his tax legislation through Congress.
