German Stocks Rebound From Two-Day Decline Before ECB
Volkswagen AG (VOW), Continental AG (CON) and Daimler AG (DAI) all advanced at least 1.5 percent. Celesio AG (CLS1) lost 7.1 percent after Jefferies Group LLC cut its recommendation for the drug distributor. Commerzbank AG fell for a fourth day.
The DAX gained 0.6 percent to 7,878.79 at 9:59 a.m. in Frankfurt. The gauge has retreated 7.7 percent since its all-time high on May 22, when the Federal Reserve signaled that it may start to pare stimulus if the U.S. economy strengthens in line with its forecasts. The broader HDAX Index rose 0.9 percent.
“We’re getting to the point where Draghi needs to put his money where his mouth is,” Michael Hewson, a market analyst at CMC Markets Plc in London, told Mark Barton on Bloomberg Television.
The ECB will leave its benchmark interest rate unchanged at a record low of 0.5 percent today, according to 61 of 62 forecasts in a Bloomberg survey of economists. The central bank will announce the decision at 1:45 p.m. in Frankfurt and President Mario Draghi will address the press 45 minutes later.
Investors will watch Draghi’s comments on monetary policy in the context of the debate surrounding the central bank’s Outright Monetary Transactions plan. OMT is the ECB’s as-yet-unused pledge to buy the bonds of crisis-hit countries in the euro area that sign up to reform conditions. Judges at the German Constitutional Court in Karlsruhe are considering whether the program contravenes the nation’s Basic Law.
The DAX dropped 1 percent yesterday as the leader of the junior partner in Portugal’s two-party ruling coalition said he’ll resign from the government. Paulo Portas, who is both foreign minister and leader of the CDS party, will meet with Prime Minister Pedro Passos Coelho in an attempt to hold the coalition together. A CDS official said Portas will seek a guarantee that his party can retain an influence on policy.
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