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Colin First

European market last week saw mixed performance in forex and equity markets. While forex market saw EURO close for the week on a dovish note, equity markets closed on a positive note with relatively high gains. At end of the week, DAX index in Frankfurt stock exchange was up by 2.91% which indicated that risk appetite in the broad market helped German equities trade positive despite prevalent political issues which added bearish pressure to market from fundamental standpoint. As the major powers in Europe – France & Germany suffer from impact of Yellow Vest protests and trade war with the US continue to affect economic growth in respective countries, Pan-EU Axis led by Italy’s Salvini is trying to change power dynamics which has been at play so far in European markets leading to high tensions ahead of European Parliament elections later this year.

UK Parliament Session In Focus Today

On Friday, Frankfurt stock exchange saw positive price action on all three major indices. Gains in the market were led by Technology and Software shares with 582 stocks out of 778 total trading in Frankfurt exchange closing in the green. As Brexit and European political headlines took center stage last week, the impact of Sino-U.S. trade war proceedings was relatively low on the German market. Further, cues from Asian and US markets supported by steady risk appetite helped prevent sharp losses in German equity markets. Asian markets opened on a positive note for the week and traded in green across the day. But gains were limited owing to GDP update from China which hinted at growth pace slowing down and reaching lowest in nearly 3 decades. However, investor risk appetite was supported owing to fact that cumulative GDP data met with the target of 6.5% despite a significant slowdown in the Chinese economy over ongoing Sino-U.S. trade war.

Investors are now on the lookout for further headlines pertaining to Sino-U.S. trade negotiations as U.S. Treasury Department has raised concerns that intellectual property infringement issues have yet to be addressed in talks between two nations. Traders now hope that the Chinese will push for positive resolution in trade talks given the impact of ongoing trade war on its economy which has helped sustain positive price action in major Asian markets. DAX futures trading in international market was down by 0.32% on the day over cautious investor sentiment ahead of today’s UK parliament session which will address key Brexit issues which suggests DAX index is likely to face bearish pressure in market today but is likely to maintain range bound action over positive cues from Wall Street and Asian equity markets.

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