The DAX (Deutscher Aktienindex (German Stock Index)) consists of 30 major blue-chip German companies including, Adidas, BMW and Deutsche Bank that trade on the Frankfurt Stock Exchange. Recently the DAX has been struggling with reports of weak economic data and the current state of the Euro zone.
The DAX closed down this weekend by 2.4% at 8,788.81 points, its lowest level since October 2013, which is a stark contrast to the record high of 10,050.98 points earlier this year in June.
Currently we are experiencing record low yields on the German 10 year Bund; in fact investors are currently gaining a real negative return when taking into account inflation. But what are the key drivers behind this ultra low yield environment?
While country financiers are celebrating this low borrowing cost, the reasons behind it are gloomy. Initially we had observed a rally within bonds based on the ECB's strong commitment to embark upon a large scale purchase of euro zone government bonds. However the current economic data coming out of Europe and the lacking inflation across the zone is pushing investors to believe that perhaps Europe is approaching a 'lost decade' as was observed in Japan.
Not so long ago, the Chinese economy was the fastest growing economy in the world, deemed to surpass the USA in absolute GDP terms as the largest economy by size. There are a number of reasons both internal and external, which are responsible for the recent slowdown in growth for China.Read more
With the Scottish independence vote coming up on September 18th, there has been a lot of volatility surrounding some British markets. This has particular been seen in the value of Sterling. Uncertainty over the outcome of the vote, as well as uncertainty over what currency an independent Scotland would use has hit the value of the Pound.Read more
Prior to 2013 house prices increased predominantly in central London Boroughs due to an influx of cash-rich buyers. However, the housing market remained sluggish in other areas of Britain. This was partly due to the difficulty encountered by potential buyers in finding mortgages. Moreover, falling wages, economic uncertainty and the memory of falling house prices during the crisis also reduced people's intention to purchase property.Read more