DAX Index Price Forecast – DAX to Move Range Bound Today on Widening US-DE Bond Spread Difference

Dax to open flat and move range bound on cues from local and allied international markets.
Colin First

Germany equities were mixed at the close on Tuesday, as gains in the Technology, Basic Resources and Telecoms sectors propelled shares higher while losses in the Retail, Food & Beverages and Media sectors led shares lower. At the close in Frankfurt, the DAX gained 0.51%, while the MDAX index lost 0.12%, and the TecDAX index added 0.12%. Advancing stocks outnumbered falling ones by 417 to 267 and 95 ended unchanged on the Frankfurt Stock Exchange. The DAX volatility index, which measures the implied volatility of DAX options, was down 2.93% to 14.95. German equities and major markets across Europe except for UK closed on positive note yesterday. EURO is currently range bound in broad market as rising spread differential between US & German bonds are in favor of US bulls.

Sino-U.S. Trade War Impact on Market Not as High as Predicted

Asian stocks rose across the board and long-term U.S. Treasury yields hovered near four-month highs on Wednesday with investors looking past the latest escalation in the U.S.-China trade feud, seen by some market participants as less severe than expected. Wall Street shares posted a broad-based rally on Tuesday amid emerging views that the U.S.-China trade dispute’s impact on world growth might not be as severe as previously feared. The broader equity markets are able to regroup now that the latest phase of the U.S.-China trade war is over due to the United States setting the initial tariffs at 10%, rather than the expected 25%, which is seen by many as a gesture that it was buying time for further negotiations.

US Greenback has gained strength in broad markets in early Asian market hours but major currencies are fighting back resulting in range bound price action in key forex markets. This indicates that despite stronger USD, investor sentiment remains in favor of local markets which are positive sign for equity markets. DAX futures trading in international market ahead of European market hours was near flat up 0.04% on the day indicating possibility for subdued price action in German equity markets as Stock market could see some impact on widening spread difference between US & German bonds. DAX index could open neutral and move range bound during today’s market hours.

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