This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
The DAX is trading at 9575, up 0.5% as traders await the announcements from the ECB. The consensus is that interest rates will be kept at 0.25%, but there has been mounting pressure on the ECB to take action against deflation.
Inflation in the eurozone is 0.7%, which is well below the 2% target the central bank set out. Despite low growth and high inflation, the euro is relatively strong against most major currencies and this is hampering the region’s recovery. A weaker currency would help boost exports.
Traders will be focusing on the language used by ECB president Mario Draghi, who is likely to state that he sees no evidence of deflation but that the bank has tools available if required.
If Mr Draghi hints at monetary easing in the coming months, the DAX could break through the 9600 mark, a level which it found to exceed over the past two months. As stated previously, it could even move towards 9641. We may see some profit-taking if Mr Draghi completely rules out the possibility of a stimulus scheme which could take us back to 9500.