Monday, 11 September 2017

What’s next? – DAX 11.09.17

Posted by Valentine at 01:54 Labels:

DAX

The DAX futures traded 0.13 percent lower at 12,289.5 points as of 05:10 GMT on Monday, although the index is likely to kick off the session in green territory as geopolitical tensions in the Korean peninsula eased, contributing to a more optimistic market sentiment.

On Saturday, North Korea celebrated the 69th anniversary of its founding. Experts warned that Kim Jong Un could use such relevant date to launch a new missile. Last week, air footage from South Korean forces showed Pyongyang was preparing a missile test.

The German benchmark continues to trade in its consolidation range between 12,000 and 12,350. However, further sentiment recovery could open the doors to an upside move.

The index is also currently affected by the upcoming Federal elections in Germany. Chancellor Angela Merkel, who has been leading Europe’s first economy for a more than a decade, is expected to win the elections and retain its position.

However, the recent surge of far-right separatist political forces in Europe represent a risk that market players simply cannot ignore. For such reason, German stocks are likely to remain inside its consolidation range for a little longer, until the political scene is properly secured.

Another factor weighing on the German DAX is the willingness of the European Central Bank to review the current monetary configuration. In its latest encounter, ECB President Mario Draghi said the Governing Council will revise the bank’s massive QE program in October.

However, Draghi said that asset purchases will continue until the end of the year and extended if seen necessary. As expected, the ECB left unchanged its short term interest rate at 0.00 percent and its depositary rate at minus 0.40 percent.

Ahead this week, market participants will be pending on the German consumer price index, which is due for release as of 06:00 GMT on Wednesday.

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