The DAX Index Declined
DAX has decreased 0.21%. It’s now trading at 12,449.50. Eurozone PPI fell 0.4%. Tomorrow, the Fed will release the protocol of recent meeting. German retail sales increased 0.5% in May (5-month maximum). Preliminary Consumer Price Index rose 0.2% in prior month. German Manufacturing PMI indicated 59.6. All numbers above 50 suggest expansion. Today, Germany will announce Factory Orders and Industrial Production.
Last week, the euro saw some significant gains. This was attributed to Mario Draghi’s statement about the ECB’s policy steps for the future. But, there seem to be some kind of misunderstanding as the President simply intended to reassure markets that the economy is recovering and that it’s better to wait this time of low inflation out. Instead, everybody assumed that ECB is ready for an exit from an ultra-loose monetary policy. ECB isn’t likely to resort to some drastic moves, particularly the asset purchase program won’t be removed until the inflation hits the 2% objective.
Currently, fed fund futures are pricing in 47% odds for December rate hike, lower than the previous 53%. Second quarter seem to be unsuccessful for the US economy and if inflation and GDP remain soft, these chances along with the greenback will significantly fall.