German Mfg. Improves, DAX 40 and FTSE Slip Amid EU Tariff Concerns
German manufacturing showed another improvement, but the Dax 40 index and FTSE declined today as tariffs approach.
DAX 40 Reached New Highs Last Week, Despite Market Turmoil
While global financial markets have faced volatility, with major US indices down roughly 10%, Germany’s DAX 40 index has remained resilient. The index hit a record high of 23,486 points in early March before experiencing a brief pullback. However, investor confidence rebounded last week after Germany passed a fiscal reform package, pushing the DAX 40 to a new all-time high of 23,493 points.
Fiscal Reforms Drive Market Sentiment
The fiscal reform package introduced by the CDU/CSU coalition successfully passed the German Bundestag, providing renewed optimism for German equities. Although there was a minor reversal on Thursday, the 20-day Simple Moving Average (SMA) (gray) offered support on Friday, keeping the overall bullish trend intact.
Flash PMIs in Focus for the Eurozone, UK, and US
Today marks the release of Flash Purchasing Managers’ Index (PMI) data for the Eurozone, UK, and United States. These reports are closely watched as they can significantly impact market expectations regarding interest rates. Manufacturing in Germany and the broader Eurozone has been in a prolonged decline, but recent data suggests a modest recovery.
Germany March Flash PMI Data – Key Highlights
Manufacturing PMI:
Reported at 48.3, exceeding expectations of 47.0 and improving from the previous 46.5.
Reached a 31-month high, signaling a continued recovery in the manufacturing sector.
Services PMI:
Came in at 50.2, below the expected 51.6 and lower than the prior reading of 51.1.
Fell to a 4-month low, indicating slower growth in the services sector.
Composite PMI:
Registered at 50.9, close to expectations of 51.0 and improving from 50.4 previously.
Suggests a modest expansion in overall business activity.
Key Findings:
HCOB Flash Germany Composite PMI Output Index climbed to a 10-month high.
HCOB Flash Germany Manufacturing PMI Output Index surged to a 36-month high, showing the strongest production growth in three years.
Germany’s manufacturing sector showed strong signs of recovery, reaching its highest levels in over two years. However, the services sector struggled, slipping to a four-month low. The overall economy remains on an expansion path, but the divergence between manufacturing and services highlights the mixed nature of the recovery.
Trade Uncertainty Weighs on Manufacturing Outlook
The upcoming April 2 tariff deadline is a major concern for the manufacturing sector, potentially impacting business sentiment. However, the recent German fiscal reforms could help offset some of these concerns. Given that the survey period for the PMI data may not fully reflect the impact of the German reform package, trade-related uncertainty is expected to weigh more heavily on today’s reports. Analysts predict that many German and Eurozone firms may have frontloaded orders ahead of the tariff implementation, which could slightly distort this month’s PMI figures.
Overall, the German stock market continues to show strength, but upcoming economic data and geopolitical developments will play a crucial role in determining whether this momentum can be sustained.
German Index DAX 40 Live Chart
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals