Eurozone stocks slide ahead of ECB meeting

Equity markets in the eurozone are drifting lower as traders await the interest rate decision from the European Central Bank.

The DAX is trading at 9619, down four points on the day as traders sit on their hands in the run up to the ECB’s interest rate announcement and press conference at 12.45pm and 1.30pm (London time) respectively.

This morning the services purchasing manufacturing index reports from Spain, Italy and the eurozone all came in below expectations. When coupled with the poor eurozone inflation and growth figures this week, this does not paint a pretty picture.

Interest rates in the eurozone are at record lows of 0.25% and the consensus for today’s meeting is to keep it unchanged. Mario Draghi is likely to keep reiterating that there is no need to loosen monetary policy, but it may be required in the coming months. If Mr Draghi suggests introducing negative interest rates on deposits, we could see the German stocks trade higher.

As Brenda Kelly stated, the DAX has strong support at 9600. If Mr Draghi hints at monetary easing, it could push the DAX towards yesterday’s high of 9647.

Germany 30 chart

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.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.