DAX falls for a fifth straight day in a cautious start to a busy week – Daily Market Brief, September 19, 2022

European stocks & US futures head lower in a week set to be dominated by central bank action, with interest rate decisions due from the Federal Reserve, BoE, and BoJ.

·         PBoC cuts the repo rate and injected more cash sending CNH lower

·         Porsche IPO targeting €70-€75 billion valuation, below the initial €85 billion expected

·         Oil holds at $85.00 as China eases some lockdown restrictions

Global stocks fell sharply lower last week, in the worst weekly performance since early June, as fears over high inflation and aggressive central bank action hit risk appetite. In Europe, the DAX fell 2.6% across the week, falling below 13000 to a weekly low.

Meanwhile, data showing that US inflation was hotter than expected sent the Nasdaq over 5% lower and US 2-year treasury yields over 3.87% – a reflection of worries over an outsized rate hike from the Federal Reserve and fears that aggressive monetary policy tightening could trigger a recession.

As the new week begins, stocks are set to open in the red in cautious trade ahead of a hectic week. Central bank decisions are awaited from the Federal Reserve, the BoE, the BoJ, the Swiss National Bank, and Norway’s central bank. The UK markets remain closed today in honour of the Queen’s funeral.


The PBoC kicked off the slew of central bank decisions this week, cutting a repo rate on Monday while also increasing cash injections into the economy as it looks to boost growth after COVID lockdowns. Following the announcement, the yuan fell 0.4% to over 7.0095 against the USD, marking the second day above the psychological 7 level.

Looking ahead

The economic calendar is very quiet on Monday. The eurozone economic calendar is relatively quiet across the week, although Friday sees the release of Eurozone PMI data. This will provide an initial insight into how the business activity held up in September after two months of contractions. The data comes as recession fears continue to rise in the bloc. Expectations of two straight quarters of contraction in the coming 12 months have risen to 80%, up from 60%.

Porsche IPO

Over the weekend, Volkswagen announced that it is targeting a €75 billion valuation for its luxury car maker Porsche when it is floated on the stock market. Trading is due to start on September 29 in what will be Germany’s second-largest IPO ever. However, this target valuation is slightly below the initially expected €85 billion amid investor concerns over rising interest rates and a global recession.


After falling 2% last week, oil prices are holding steady at around 85.00 per barrel as investors weigh up concerns over the demand outlook, as global growth is set to slow, and the easing of some COVID lockdowns in China, the world’s largest importer of oil. The Chinese city of Chengdu, home to over 20 million inhabitants, ended a two-week lockdown, helping to soothe some demand concerns. However, oil trades down over 15% from early August as higher interest rates across the globe are expected to slow growth considerably. The IMF warned over downside risks to the global economy, with some countries expected to slip into recession in 2023.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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