Advertisement
Advertisement

DAX Daily Fundamental Forecast – December 05, 2016

By:
Colin First
Published: Dec 5, 2016, 04:37 UTC

The DAX closed higher for the day on Friday as the NFP report led to a round of fresh buying in the major stock markets around the world. The NFP report

DAX Daily Fundamental Forecast – December 05, 2016

The DAX closed higher for the day on Friday as the NFP report led to a round of fresh buying in the major stock markets around the world. The NFP report came in which was as per expectations and the numbers were very strong. But what threw cold water in the numbers was the fact that the average wages came in much lesser than expected. This showed that the quality of jobs being created was lesser than what is needed for the economy to grow and the cash flow to happen and this proved a dampener. The markets have already priced in a rate hike in December and they have started to look towards 2017 and they wait for data and guidance from the Fed on when the rate hikes in 2017 are likely to happen.

DAX Hourly
DAX Hourly

But with the disappointment in the wage numbers, we believe that further rate hikes would be delayed till atleast the middle of 2017 and this helped to bring cheer to the stock markets and this would mean that the funds would continue to stay in the stock markets for that much longer and not be pulled out immediately in anticipation of further rate hikes in the US. This helped to push the DAX back above 10500 and below the broken support at 10600.

But today, we can expect a bearish opening to the DAX and other European stock markets as the Italians voted a No in their referendum and the Italian PM Renzi has resigned, throwing the Italian politics into turmoil and this is likely to affect the financial situation in the Euro region as this would mean reduced investor confidence in the euro. So, expect a bearish opening to the DAX and this bearishness is expected to continue through the day and we could see a test of 10380 followed by a test of 10200 as well. For those traders who waited for a break of 10800 before buying, it is good that they did so cos the break never came!

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

Did you find this article useful?

Advertisement