DAX Drops Further as European Stock Markets at Multi-week Lows
European stock indexes fell today amid aggravated tensions between Italy and the European Union due to the formation of the budget for 2019. European stock markets fell to multi-week lows, as Eurozone bond yields continue to rise. The German DAX stock index dropped by 0.48% to 11.888 level. Earlier today, the DAX hit 17-month lows, as rising US Treasury bond yields continue to exert pressure on global equity markets.
The US 10-year Treasury note, which serves as a benchmark for a wide range of lending activities, rose 2.4 basis points to 3.254%, pushing above the 3.25% threshold for the first time since late April 2011. 30-year treasury bonds climbed to 3.44%, a four-year high.
The IMF cut global growth forecasts for both 2018 and 2019. Eurozone economic growth is projected at 2.0% (2.4% prior) in 2018 and 1.9% (2.0% prior) in 2019. Meanwhile, German economy is expected to grow by 1.9% (2.5% prior) in 2018 and 1.9% (2.0% prior) in 2019. The German government is due to release its updated economy forecasts this Thursday. And it’s expected that there would be downward revision to growth for this year and next too.
German exports were down 0.1% to 110.3 billion euros ($126.24 billion) in August, in seasonally and calendar adjusted numbers. Imports decreased 2.7% to 92 billion euros. In seasonally adjusted term, German trade balance widened to EUR 18.3B in August.