Home Forex Markets Analysis of the German DAX40 index trend: The International Monetary Fund (IMF) once again lowered its economic forecasts

Analysis of the German DAX40 index trend: The International Monetary Fund (IMF) once again lowered its economic forecasts

by WOOWinvest
0 comment
Analysis of the German DAX40 index trend: The International Monetary Fund (IMF) once again lowered its economic forecasts


The chain reaction caused by the military conflict between Russia and Ukraine continued to impact the political and economic situation in Europe. At the same time, inflation and recession caused by high oil prices lingered, and European stock markets were depressed. Today, the IMF lowered its European and global economic forecasts. The European stock market represented by the German index is the most Injuried.

As a representative index of European stock markets, the German DAX40 index leads the sentiment of the entire European stock market to a certain extent. As the staged rebound of the German index is blocked, more and more risk events are gathering, and the outlook for European stock markets is bleak.

First, the impact of the protracted military conflict between Russia and Ukraine. The Russian-Ukrainian military conflict has lasted for more than five months, and there is no possibility of a ceasefire except for the recent agreement on the Ukrainian grain transportation issue. Russian Foreign Minister Sergei Lavrov warned the United States and Europe last week that Russia could expand its military activities if it supplies Ukraine with long-range weapons. Geopolitical risks continue to drive oil prices up, and high oil prices have seriously pushed up European inflation and threatened the European economy. Funds have flowed out of Europe in large numbers for several months. The United States and the European Union continue to introduce new sanctions against Russia, which is likely to force Russia to bow. However, high oil prices are generating income for Russia, and the European Central Bank has raised interest rates for the first time in 11 years due to price pressures, further exacerbating the possibility of European economic recession. The political situation in Italy and other countries is unstable, and the situation in Russia and Ukraine has led to more uncertainty still fermenting.

Second, the market is concerned about the Fed raising interest rates and the possibility of a US recession. The United States is also affected by the impact of oil prices on prices, and Biden’s visit to Saudi Arabia has had little effect, and the inflation problem has forced the Federal Reserve to take action. A number of U.S. data suggest that the U.S. economy is slowing, with weakness in consumer data being the most concerned. Market speculation that the Fed will still slow rate hikes due to the situation, but will need to wait for Powell’s confirmation, which makes this week’s FOMC meeting even more important. The Fed’s stance on inflation and recession will affect other central bank decisions, and ripple through the global economy and financial markets. The decline in U.S. stocks is worse than the decline in European stocks.

Then, today’s report from the International Monetary Fund (IMF) drew attention.

The IMF released the update of the “World Economic Outlook Report”, predicting that the world economic growth rate will slow from 6.1% in 2021 to 3.2% in 2022, 0.4 percentage points lower than the forecast in April; the world economic growth rate is expected to be 2.9% in 2023 , 0.7 percentage points lower than the April forecast.

Specifically, the U.S. economic growth in 2022 and 2023 is expected to be 2.3% and 1.0%, respectively, down 1.4 and 1.3 percentage points from the April forecast.The euro zone’s economic growth forecast for this year and next is 2.6% and 1.2%, respectively, down 0.2 and 1.1 percentage points from the April forecast.

The IMF noted that the world economy faces multiple downside risks, includingThe Ukraine crisis led to a sudden halt in European gas imports from Russia, inflation was more difficult to control than expected, and tightening global financial conditions exacerbated emerging market and developing economies’ debt problemsWait. If these risks materialize and inflation rises further, world economic growth will slow to 2.6% in 2022 and 2.0% in 2023.

This is the agency’s second downward revision after lowering its world economic growth forecast in April.

Adding to the woes of an already weak and sensitive European economic outlook could affect long-term funds’ focus on European assets.

The trend of the German DAX40 is also showing signs.

On the whole, after losing 14800, the German index has turned to an overall decline, and the short-term situation has fallen into a low level of 13500-12500. Although the index forms a triple bottom at the 12500 line, the suppression of 13500 has not decreased at all. Once it falls below 13000, it still faces another decline. The risk of breaking 12500, and then continued to drop, entering a larger bear market decline.

To maintain the view of shorting the German index on rallies, refer to the resistance at 13400 and 13800.

(by Arthur)

The content on this page is for general market commentary only and may not constitute investment advice of any kind (tax, legal, accounting). This article does not constitute an invitation or recommendation for direct investment in specific financial products. The content is for reference only. Readers should not rely on the information in this document, nor should its actions and omissions be relied upon. We are not responsible for the results of any person’s actions or omissions based on this article. We make no warranties as to the accuracy of the content provided or the adequacy of the information. This article is not intended for distribution within the territory of the People’s Republic of China (excluding Hong Kong, Macau and Taiwan for this purpose), except as permitted by the applicable laws of the People’s Republic of China.

Copyright Notice: Except for the purpose of viewing the information on this website, or as permitted by applicable law or these terms and conditions, no one may copy, use, upload, link, or publicly perform in any way to third parties without our specific written permission , publish or transmit any information or content on this website. We reserve the right to further investigate the legal responsibilities of the relevant actors for the infringing acts of unauthorized reprinting. If you have business cooperation needs such as market promotion and resource exchange, please contact us.

element inside the element. This is probably not what you meant to do! Load your application’s JavaScript bundle inside the element instead.

You may also like

Leave a Comment

Our Mission is to help you make better trading decisions by providing actionable investing content, comprehensive tools, educational resources and assist you in making more money in the stock market.

Latest News

Newsletter

Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

@2022 – All Right Reserved. Designed and Developed by WOOW Invest

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy