DAX, DOW, and FTSE Edge Higher on a Positive Risk Tone Tuesday

• DAX 40:Moderately higher as ECB President Christine Lagarde confirms interest-rate intentions.
• FTSE 100: FTSE presses ahead amid biggest UK rail strike in 30 years.
• DOW JONES: US equities trickle higher as we await testimony from Fed Chair Powell.

DAX 40: Moderately Higher as ECB President Christine Lagarde Confirms Interest-Rate Intentions

The DAX posts moderate gains during the European session to follow up from yesterday’s gains of around 1.06%. Concerns remain around rising rates and slowing growth which could spark a global recession. The positive sentiment in Europe comes as global markets appear to be staging a comeback rally after a tumultuous last week, after several global central banks continued, or in some cases began tightening monetary policy to tame red-hot inflation.

Yesterday we had testimony from European Central Bank (ECB) President Christine Lagarde, who reiterated the central bank’s intention to raise interest rates in July and September even after the recent volatility in the Eurozone’s bond markets.

Surging inflation and the higher interest rates to combat this have resulted in corporate distress in companies in Germany, the U.K., France, Spain, and Italy reaching the highest levels since August 2020, according to the Weil European Distress Index.

Concerns have grown meanwhile, as the deteriorating relationship between the EU and Russia threatens to create larger obstacles for the Euro Zone. Any interruption in energy supplies, particularly to Germany could leave Europe’s most industrialized economy reeling. This would undoubtedly have a negative impact on the Dax and many of its constituents.