27.03.2019 – Daily report. The rise to new price peaks is a tough business for the Frankfurt Stock Exchange. After initial gains, the DAX is now trading in the red, and risk aversion persisted on Wednesday morning. Federal bonds were in demand for this. The factors ECB and Brexit were responsible. After all, hope germinated for the upcoming round of talks in the US-China Trade War.
The DAX is Trapped
Slight losses in Frankfurt: After an early plus at noon, the DAX has returned to the south. In the meantime, it slipped by around 0.4 percent to around 11,380 points. A small hint for chartists: the DAX is currently trapped between the 200- and 50-day lines. It toasted at the upper 200 mark six trading days ago and fell. On the lower 50 line, the index turned up again two days ago. Traders who trade CFD professionally will now naturally shake their heads. Such simple indicators should be meaningful?!? Never… Apparently they are – if enough investors follow them. We are curious, how it will continue. If trading in this narrow range continues, the DAX will have to make a decision about its direction in the coming week. Either a breakout upwards or downwards. Of course you can trade both with CFD.
Fear of Risk
Meanwhile, investors increasingly parked capital in federal bonds. And they are even paying the federal government money for this. The yield on ten-year German government bonds slipped from minus 0.014 percent to minus 0.048 percent – the lowest for two and a half years. The skepticism received new food from ECB boss Mario Draghi: At a speech in Frankfurt on Wednesday he indicated, as usual in a veiled manner, that the turnaround in interest rates could be postponed further in the event of a stronger downturn in the economy. The central bank is observing a deterioration in demand from outside the euro zone, he said at the conference ‘The ECB and Its Watchers XX’.
Slight Gains in Asia
German investors had previously received a little push from Asia. The Nikkei in Tokyo closed 0.2 percent lower at around 21,379 points. In China, however, the blue chip index CSI 300 climbed by 1.2 percent to 3,743 points. Here the anticipation of an expected customs agreement between China and the USA was building up again: US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin are scheduled to travel to Beijing for further talks tomorrow, Thursday.
Wall Street Rises Moderately
Behavior was the tailwind for Frankfurt also from New York. Wall Street had closed in positive territory on Tuesday. However, prices had crumbled. The Dow Jones, for example, said goodbye with a gain of around 0.6 percent at around 25,658 positions. The S&P 500 gained 0.7 percent to 2818 positions. And the Nasdaq 100 recorded a plus of 0.5 percent to 7351 points. The private market research institute Conference Board reported little positive news: in March, the mood of US consumers had become surprisingly gloomy. The start of construction in February had also fallen more sharply than forecast. You can find all concrete data as a service of the Bernstein Bank here to read if you scroll down a bit: https://bernstein-bank.com/de/research/#Market
Tension in the Oil Market
Of course you can also use our collection to prepare your trading day. For example, today at 3.30 p.m. you will find an interesting event in the oil market: The Energy Information Administration (EIA) reports the stock level in the USA. The question is how the US producers will react to the reduction in OPEC production. At the beginning of the year, the cartel and its allies had agreed to cut daily production by 1.2 million barrels a day in order to support the price of oil. The Saudis, in particular, have made an open secret of the fact that they are letting their pumps rest more than the rest in order to raise the price of oil to 70 dollars a barrel. The sheikhs are afraid of national bankruptcy. According to estimates by the International Monetary Fund, Riyadh even needs a price of 80 to 85 dollars a barrel.
New Brexit Loop
Wednesday’s Never Ending Story on the Brexit may provide new impulses for forex trading. The British Parliament will discuss alternatives to the Brexit deal with the EU by Prime Minister Theresa May during the day. In London, rumors had recently spread that the Prime Minister would offer her resignation to the hardliners among the Brexiteers if there were approval for the Brexit deal with the EU. So please keep an eye on the pound. And be patient. But let us be lenient in the face of the drama: such a huge step does not happen every day, even politicians have to learn. We wish you a successful day trading!
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