Monday, 23 October 2017

What’s next? – DAX 23.10.17

Posted by Valentine at 12:14 Labels:

DAX

The DAX futures were 0.05 percent into red territory on Monday at 12,973 points as market participants prepared for a new monetary policy meeting of the European Central Bank.

The European regulator will gather on Thursday to define the future of its massive quantitative easing program. For such reason, all eyes will be directed to ECB President Mario Draghi, who is set to speak following the monetary policy announcement at 11:45 GMT.

From a technical perspective, the DAX remains close to the 13,000 psychological resistance level and it has not been able to break above it despite upbeat economic data.

At this stage, seems the benchmarks needs a strong push to move above the mentioned level. For example, a reduction of the European Central Bank’s monthly asset purchases.

German policymakers have long been asking the European regulator to stop or at least reduce the asset purchase program of 40 billion euro a month.

Last week, the Federal Constitutional Court declined a request to stop the Bundesbank from being involved with the ECB monetary stimulus program.

"Because of the high volume of purchases by the Bundesbank, disrupting bond purchases would endanger or even thwart the program’s goal to raise inflation to about 2 percent," the high court said and added that "granting the interim bid now would be more than just conserving the status quo, it would be identical with granting the lawsuit.”

German stocks ended close to the breakpoint on Friday, adding a moderate 0.01 percent as construction, basic resources and logistics supported the index and as industrials, financial services and retail companies weighed on the benchmark.

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