DAX Lower Despite Acceleration of Eurozone Inflation
The German DAX stock index fell by 0.52% today and is trading at 12.717 level. European stock markets showed significant losses this week amid the continuing political drama in Italy. The DAX has lost 2.2% this week. But still, the political tension eased, as the Italian parties (the League Nord and the Five Star Movement) renewed attempts to form a government.
Global financial markets were destabilized earlier this week after two of Italy's Eurosceptic populist parties abandoned plans to form a coalition government. This increased the likelihood of new general elections and raised concerns that such a vote could be implemented as an actual referendum on the country's membership in the Eurozone.
Eurostat has reported, that the Eurozone inflation accelerated in May. The Eurozone consumer price index rose to 1.9% year-on-year in May, up from 1.2% in April. Economists had expected the CPI to increase to 1.6%. Core inflation, which excludes volatile items such as energy and food, grew to an annual rate of 1.1% from 0.7% in April.
The data came a day after figures showing that inflation in Germany, the Eurozone’s largest economy, rose more than expected in May, hitting 2.2% (the highest level in more than a year). Retail sales in Germany were unexpectedly strong in April, with a sharp gain of 2.3%. This reading ended a nasty streak of four declines.