DAX Continues to Lose Ground

Forex News

European stocks fell on Thursday and the DAX continued to show volatility. The German DAX stock index fell by 0.38% to trade at 11.171 level. After sharp losses early in the week, the DAX posted gains on Wednesday, but has again headed lower in Thursday trade. The DAX has lost 6.67% in October and 2.1% in November.

As US markets are closed today for Thanksgiving and concerns about the weakening of the Italian budget standoff remain, investors are looking forward to next week’s G20 summit and the Brexit summit this weekend for directional signals.

Yesterday, the European Commission rejected Italy’s draft 2019 budget, saying it was in breach of EU deficit and debt rules. Italy’s debt stands at a staggering 132% of GDP, and the EU is concerned that the high-spending budget could cause another debt crisis in the Eurozone.

The European Central Bank will release the minutes from the 25 October meeting. Eurozone growth is weak, and investors will be watching closely for any hint of uncertainties from Governing Council members over policy normalisation. Even as Eurozone growth momentum slows, the ECB have stuck with plans to end its asset purchase program from December and begin raising interest rates at the end of 2019.