U.S. Government Shutdown Drags DAX Lower Amidst Global Market Caution
The U.S. government has entered a partial shutdown, with Democrats and Republicans in Congress failing to agree on a budget extension. The Office of Management and Budget has directed agencies to implement shutdown plans, leading to a halt in many government operations and strain on essential services. Meanwhile, the German stock market, as reflected by the DAX, is feeling the impact, trading lower amidst global market caution.
The U.S. government shutdown, which began at 6:00 AM German time, has cast a shadow over both German and U.S. stock markets. The DAX is trading slightly lower on Wednesday, threatening to bounce off the resistance level around 23,850/890 points again. A break above this resistance could accelerate the DAX's recent recovery and drive it towards the 24,000-point mark. However, if the DAX fails to break through this resistance, it could lead to a pullback with support levels at 23,795 and 23,720/700 points.
Adding to the market's caution, retail sales in Germany missed expectations, coming in at -0.2 percent instead of the forecasted +0.6 percent. Conversely, the inflation rate in Germany unexpectedly rose to 2.4 percent in September, the highest level of the year.
The U.S. government shutdown and mixed economic indicators from Germany are weighing on global markets, including the DAX. Despite Tuesday's stability, the DAX is now trading lower, reflecting investor caution. The key resistance level around 23,850/890 points remains a critical barrier for the DAX's recovery. The market's next moves will likely be influenced by developments in the U.S. government shutdown and further economic data from Germany.
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