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Dax Index Daily Price Forecast – German Equities To Trade Dovish On Cues From International Market

By:
Colin First
Published: Jan 2, 2019, 06:55 UTC

German and Euro area macro data could provide positive influence on market but overall momentum is expected to remain dovish on cues from international markets.

Dax Index Daily Price Forecast – German Equities To Trade Dovish On Cues From International Market

German equity markets closed positive last Friday ahead of New Year holiday market as gains in the Technology, Food & Beverages and Chemicals sectors propelled shares higher. At the close in Frankfurt, the DAX added 1.71%, while the MDAX index added 1.35%, and the TecDAX index added 2.08%. Advancing stocks outnumbered falling ones by 592 to 133 and 49 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was down 7.66% to 23.39. European markets closed positive ahead of New Year eve as investors risk appetite remained high despite thin trading volumes on headlines which indicated positive progress in Sino –US trade negotiations and Italian budget negotiations with EU.

Brexit Will Remain Thorny Issue For European Market

Asian shares crept cautiously higher on the first trading day of the New Year as early gains in U.S. stock futures spoke of some improvement in risk appetite. But all gains from early Asian market hours was reversed and indices took sharp bearish dive as more disappointing economic data from China darkened the mood and erased early gains in U.S. stock futures. Moving forward trading in equity market is expected to remain subdued over clearly prevalent bearish sentiment as investors across globe agree on the fact that global economy has slowed down. Investors are cautious heading into January as key events that swayed the market for prolonged duration are expected to be addressed later this month.

German and European markets are set to see release of Manufacturing PMI which will greatly impact price action in European equities today. While progress has been made in Italian budget negotiations no solid conclusion on budget changes have been announced yet. Investors are also worries about fresh influx of brexit headlines which could strengthen the already prevalent bearish set up in market as EU’s Juncker indirectly hinted that no clarifications will be given on Irish backstop when he commented that UK should take care of resolving its own problems relating to brexit deal. Cues from international market are also dovish with DAX futures trading in international market down by 0.78% ahead of Frankfurt market opening suggesting that DAX index and germane equities are likely to trade dovish across today’s European market hours.

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.

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