DAX Index Sinks After Eurozone CPI Report

Forex News

European stock markets declined, while investors closely followed the trade negotiations between the US and China and evaluated new earnings reports. The German DAX stock index fell by 0.37% and is trading at 12.753 level.

Eurozone inflation unexpectedly slowed in April, adding to a string of data that could make it more difficult for the European Central Bank to curb its monetary stimulus later this year. Report from the Eurostat showed, that the Eurozone CPI declined to 1.2% year-on-year in April, while economists expected the rate to be unchanged from March's 1.3%.

The weak reading follows disappointing GDP, output, export and sentiment figures, which suggest that Eurozone economic growth has slowed after a five-year run and will at best slow to a more moderate level, below optimistic forecasts at the start of the year. The bloc's GDP growth slowed to 0.4% in the first quarter from 0.7% in Q4 2017. The European Commission said in its spring economic forecast that growth should be a robust 2.3% this year and ease to 2.0% in 2019. At the same time, the European Commission expects that inflation in the euro area will accelerate to 1.6% in 2019 from 1.5% this year.

Attention of the markets will shift back to the data after the Federal Reserve did little to surprise markets in Wednesday’s policy announcement. As it was widely expected, the Fed kept interest rates unchanged and noted that inflation was starting to inch higher, leaving it on track to raise borrowing costs in June. The US will publish the weekly report on initial jobless claims, as well as readings on worker productivity and the trade balance.