DAX 30 Fundamental Forecast – September 6, 2016

The DAX 30 continues to rally as the euro holds below its average trading range and before a lot of German data due this week. The rebound in oil prices is helping equities today. The index is trading at 10727.20 up over 40 points. Stocks across Europe pushed higher Friday, after a lackluster U.S. monthly jobs report dampened expectations for an interest-rate hike by the Federal Reserve later this month.

The Stoxx Europe 600 popped up 1.6% to 349.10, moving toward its highest close since late May, with some major national indexes jumping by more than 1%. The index was on track for a weekly rise of 1.5%. Germany’s DAX 30 rose 1% at 10,634.87 and France’s CAC 40 index climbed 1.6% to 4,511.80.

“The odds have been cut of a rate hike in September,” as they fell to 20% immediately after the report, according to CME Fed funds futures, said the managing director at Charles Schwab in London.

“But I would still argue, based on the weight of all of the data that we’ve seen, that the U.S. economy warrants a rate hike,” he said. “We’re baking in at least one before the end of the year, and the consensus seems to be December, to be on the safe side.”

Shares of European exporters tend to come under pressure when the euro rises, but the euro’s gain after the data appeared modest, with the shared currency up at $1.1203 compared with around $1.1185 ahead of the report.

The ECB is on deck: Before the Fed meets, the European Central Bank, led by President Mario Draghi, will gather next Thursday.

Recent Eurozone data have overall been “more resilient than feared right after the U.K. referendum. On balance, we believe this gives the ECB scope to delay its decision on an extension of QE until 8 December, said UBS chief economist in a note.

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Upcoming Economic Events that you should be monitoring:

 September 6, 2016

Government Bond Auctions

Date Time Country Auction

Sep 06 11:00 Austria Holds bond auction

Sep 06 11:30 UK 1.5% 2026 Gilt

Sep 06 11:30 Germany Holds I/L bond auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction