FX.co ★ DAX Down Nearly 0.5%

German stocks are experiencing a decline this Wednesday morning, particularly impacted by losses in the automotive sector. This downturn is largely driven by persistent concerns over a potential trade war, despite the recent decision by the U.S. government to postpone the introduction of new tariffs on Mexico and Canada by 30 days.

Investors' attention is currently centered on corporate earnings, while they anticipate forthcoming economic data from both the United States and major European economies to provide further guidance.

The DAX index has dropped by 103.50 points, equivalent to 0.48%, standing at 21,407.34, which is approximately 20 points above the session's lowest point.

The yield on Germany's 10-year Bund has decreased to around 2.36%, marking its lowest level in nearly a month. This decline is attributed to fears that new U.S. tariffs could trigger deflationary pressures, potentially leading to additional monetary easing by the European Central Bank.

Notable declines of 1.9% to 2% are observed in shares of Continental, Daimler Truck Holding, and Porsche. Meanwhile, stocks of Bayer, Volkswagen, Symrise, Sartorius, Mercedes-Benz, Fresenius Medical Care, Siemens, and Adidas are down by 1% to 1.6%.

Companies such as MTU Aero Engines, BMW, Beiersdorf, Brenntag, Zlando, Henkel, and Munich Re are witnessing modest declines.

Conversely, Siemens Energy is registering nearly a 2% gain, with Vonovia rising by 1.7% and Commerzbank up by 0.7%.

In terms of economic indicators, the HCOB Germany Composite PMI was adjusted upward to 50.5 in January 2025 from an initial reading of 50.1 and 48.0 in December, indicating its first expansion in seven months. The services sector expanded in January, attaining a PMI of 52.5. Meanwhile, the manufacturing sector experienced a slower contraction, recording a PMI of 45.0.

Additionally, the HCOB Eurozone Composite PMI increased to 50.2 in January 2025 from 49.6 in the prior month, aligning with preliminary estimates and surpassing expectations of 49.7. The services sector PMI stood at 51.3 for January, down slightly from 51.6 in December 2024, whereas the manufacturing sector recorded a PMI of 46.6, up from 45.1 in December.