The DAX index has posted gains in the Monday session. Currently, the DAX is trading at 12,400.00, up 0.44% since the Friday close. It’s a quiet start to the week, with no eurozone indicators.
It was an excellent week for European stock markets, and the DAX surged with a 4.4% gain. There was concern on the part of investors after US President Trump made good on his threat and imposed stiff tariffs on steel imports, drawing harsh criticism from the EU. However, Trump has exempted Canada and Mexico from the tariffs, and has said that Washington could ease the duties on other countries as well. Importantly, is strong domestic opposition to Trump’s move, including senior Republican lawmakers who have said they will work to overturn the tariffs, which could spark an all-out trade war. So far, the markets are confident that a solution to the tariff tussle will be found.
The ECB didn’t change the benchmark interest rate on Thursday, which remained pegged at 0.00%. Still, the ECB meeting had plenty of drama, as policymakers removed a long-standing clause known as ‘easing bias’, which stated that monthly asset purchases could be increased if economic conditions were to worsen. The removal of easing bias can be seen as a small step towards winding up the asset program, which is scheduled to end in September. However, Mario Draghi dampened the party, saying that that eurozone inflation could remain subdued, so the Bank’s monetary policy would remain ‘reactive’. Investors took the comments as a sign that the ECB is no rush to tighten monetary policy, which boosted the German stock markets, while sending the euro sharply downwards.
