DAX Index Weakened As US and China Talk Trade
DAX declined 0.93% to trade at 11,984 pts. German Retail Sales fell 0.7%, marking the 4th drop since the beginning of this year. German manufacturing PMI as well as the Eurozone index lowered but matched projections and still suggested expansion in the sector.
There are continuous speculations about ECB policy tightening. Jens Weidmann (German central bank head) insists on ending the QE program as soon as possible and adds that a rate hike in mid-2019 is a rather possible scenario. Klaas Knot (Dutch central bank head), on the other hand, says the asset purchase program should resume instead of ending in September. But, if ECB ultimately decides to terminate it, euro will soar.
Chinese government raised tariffs on 128 US goods to 25%. The list of products includes frozen pork, wine, certain fruits, nuts and sums up to 3 billion dollars. This came as an expected response to US steel and aluminum tariffs. And now, speculations and concerns about a U.S.-China trade war have only increased. Meanwhile, Trump is planning to impose some 60 billion dollars tariffs on China’s products. Stock markets are volatile due to the scandal.