DAX Pressured by Global Trade Tensions, Reaching 5-Month Low
European stock indexes declined, as new concerns about global trade conflicts influence investors' risk appetite. The German DAX stock index fell by another 0.50% to trade at 12.149 level. Yesterday, the DAX fell 1.4%, reaching its lowest level since early April.
The German private sector expanded at the fastest pace in six months in August. Composite PMI rose to 55.6 from 55.0 a month ago. However, the estimate was lower than the preliminary 55.7. The German Services PMI improved to a 6-month high of 55.0 from 54.1. This was also weaker than the preliminary estimate of 55.2.
Eurozone Services PMI rose to 54.4 in August from 54.2 in July. Eurozone retail sales fell by 0.2% month-on-month and rose by 1.1% year-on-year. Economists had expected the same 0.2% drop in July and a 1.3% yoy growth.
The Trump administration aims to impose tariffs on $200 billion of Chinese goods, which could go into effect as soon as Friday when a public comment period on the taxes concludes. It's unclear whether the new tariffs will be set at 10% or 25%. The Trump administration slapped 25% tariffs on $34 billion of Chinese imports in July and another $16 billion last week.
The markets are also focused on the development of world trade, and it is expected that the negotiations between Canada and the US will begin on Wednesday. Both countries are seeking a common ground for the revision of the North American Free Trade Agreement (NAFTA) after the last round of negotiations without an agreement.