Friday, 1 September 2017

What’s next? – DAX 01.09.17

Posted by Valentine at 10:05 Labels:

DAX

The DAX futures traded 0.50 percent higher at 12,066.5 points as of 04:20 GMT on Friday, with traders looking ahead to key releases later in the session.

Friday will be a strong day for data, with Germany’s manufacturing PMI set for release as of 07:55 GMT and that same report for the EU and the UK coming up at 08:00 GMT and 08:30 GMT.

However, the main focus will be at the August employment report in the US. Average hourly earnings, nonfarm payrolls and the unemployment rate will be available as of 12:30 GMT.

The German benchmark ended higher on Thursday at 12,055.84, adding 53.37 points or 0.44 percent as basic resources, construction and technology sectors led advancers.

The best performers were Lufthansa, which grew 3.56 percent to 21.070, followed by Thyssenkrupp rising 1.92 percent to 25.190 and Infineon Technologies stocks increasing their value 1.76 percent to close at 19.370.

The worst performers were Continental easing 0.99 percent to 189.55, Daimler falling 0.58 percent to 61.230 and Bayerische Motoren Werke down 0.47 percent to 78.000.

The DAX was able to push higher despite downbeat economic data from Germany. Retail sales fell 1.2 percent in July against an estimated decline of 0.4 percent. The unemployment rate remained steady at 5.7 percent last month.

In the euro zone, the core consumer price index came in at 1.2 percent, in line with market analysts’ expectations. Inflation is currently a hot topic in the euro zone as the European Central Bank is preparing to reduce or suspend its massive stimulus program in the short term.

Nevertheless, such steps will only be taken after Germany celebrates parliamentary elections in September, stabilizing Europe’s first economy political scene.

From a technical perspective, the situation hasn’t changed much, with the benchmark holding short distance from the bottom of the 12,000 - 12,350 range. As we predicted earlier this week, the index is likely to stay quiet until US inflation data goes out and even afterwards too.

The 12,000 mark is now working as a support level, but it’s not to be trusted. As the employment data gets closer every hour, profit taking could provoke a moderate downward correction.

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