The DAX index continues to point higher and has recorded considerable gains in the Tuesday session. Currently, the pair is trading at 12,420, up 0.73% on the day. There are no German or eurozone events on the schedule. On Wednesday, the Federal Reserve will publish the minutes of the July policy meeting.
Central banks will be in focus during the week. On Wednesday, the Fed releases the minutes of the July meeting, while the ECB publishes its July minutes on Thursday. This will be followed by the Jackson Hole Symposium, a gathering of the heads of the major central banks. Investors will be keenly following these events, looking for hints regarding future monetary policy on the part of the ECB and the Federal Reserve. The U.S economy continues to show strong growth but inflation and wage growth continue to lag, and Fed chair Jerome Powell will be expected to address these issues.
The DAX has started the week with gains and is currently at a 1-week high. Although the index is in the red in the month of August, investor risk appetite has improved, following the announcement that the U.S and China had agreed to hold trade talks later this week in Washington. This follows months of escalating trade tensions, which have dampened risk appetite. The U.S is unhappy with the Chinese protection of local markets and technology transfers required in order for U.S businesses to operate in China, but it’s questionable if the Chinese will show much flexibility. If the talks show signs of progress, such as the suspension of a $16 billion tariff scheduled to take effect on August 23, German stock markets could continue to gain ground.
