DAX Jumps as Services PMIs Climb

The DAX has posted strong gains in the Thursday session. In North American trade, the index is at 13,185.50, up 1.57% on the day. The index is currently at a 2-week high. On the release front, German Final Services PMI improved to 55.8, matching the forecast. Eurozone Final Services PMI followed suit, climbing to 56.6, which edged above the estimate of 56.5 points. Friday will be busy, as the Germany releases retail sales, and the eurozone publishes CPI Flash Estimate.

Germany’s economy continues to impress, as fourth quarter numbers point upwards. Manufacturing and services PMIs gained ground in December, and inflation accelerated to 0.6%, edging above the forecast of 0.5%. The strong gain matched the February reading, equaling the strongest gain recorded in 2017. Unemployment rolls continue to fall, as the labor market continues to remain tight in a robust economy. The numbers are all the more impressive as the political landscape remains uncertain, following inconclusive elections in September. President Angela Merkel is now eyeing the Social Democrats as a coalition partner, but negotiations are moving at a slow pace.

European stock markets have posted strong gains on Thursday, buoyed by sharp German and eurozone Services PMIs. These releases come on the heels of strong Manufacturing PMIs in Germany and the eurozone. With the manufacturing and services sectors continuing to expand, investors like what they see in Europe, and the euro and the DAX have pushed higher on Thursday. German Retail Sales are expected to rebound in December, with an estimate of 1.0%. If the indicator meets or beats expectations, the  DAX rally could continue.

 

Economic Calendar

Thursday (January 4)

  • 3:55 German Final Services PMI. Estimate 55.8. Actual 55.8
  • 4:00 Eurozone Final Services PMI. Estimate 56.5. Actual 56.6

*Key events are in bold

DAX, Thursday, January 4 at 11:15 EDT

Open: 13,062.50 High: 13,207.50 Low: 13,061.00 Close: 13,185.50

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.