Wednesday, 16 August 2017
What’s next? – DAX 16.08.17
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what’s next
DAX
The DAX futures traded 0.67 percent higher at 12,254.5 points as of 07:40 GMT on Wednesday, with market participants awaiting key economic reports from Europe and the US.
A preliminary reading on Eurozone’s gross domestic product will be released at 09:00 GMT, with a quarterly 0.6 percent growth rate expected and a 2.1 percent advance year-over-year.
But the key event of today’s session will be FOMC minutes at 18:00 GMT. Investors count on that report to provide better guidance over the future plan of monetary policy.
No relevant reports are scheduled in Germany today. But as we have mentioned in other occasions, the index has been showing very little reaction to local economic data.
According to Fed funds tracked by CME Group’s FedWatch tool, investors are currently pricing in a 46.8 percent probability of a 25 basis point rate hike by December.
Fed’s July meeting did not bring any changes, leaving short-term interest rates in a range between 1.00 and 1.25 percent. However, it was noted that a third rate hike in 2017 was still on track, as well as the plan to reduce the regulator’s massive balance sheet.
From a fundamental stand, the index is looking at an empty basket of drivers, with ECB’s tapering expectations as the only serious matter catching traders attention. However, it is unlikely we would see any moves on that area in the near term.
The upcoming elections in Germany in September will certainly create some volatility for the index, which could be seen as an opportunity both for bulls and bears.
For now, the 12,350 level continues to work as a ceiling for the index, with the 12,250 providing some support as the risk-on sentiment continues to improve.
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