· European benchmarks rally at the beginning of the week
· DAX (DE30) rebounds from the support zone
· Deutsche Bank (DBK.DE) is seeking to revive its equities unit
Asian equities kicked off the week in the mixed moods following Friday’s gains on Wall Street. European benchmarks opened significantly higher on Monday morning with the broad rebound in all industry groups.
US equity benchmarks managed to pare initial weakness on Friday closing the week with green daily candlestick. On the Monday morning S&P 500 futures has traded higher amid improving moods on the global markets. One should keep in mind that President Donald Trump is about to deliver his 2019 budget proposal later today. Asian session was quite mixed with Chinese equities posting slight gains after one of the worst weeks for the country’s stock market. However, Hang Seng CE (CHNComp) closed flat. On the other hand, shares in Australia underperformed with S&P/ASX 200 (AUS200) closing 0.3% lower. The stock markets in Japan were closed due to holiday.
European stock indices kicked off the week trading significantly higher. All the Euro Stoxx 600 industry groups are posting decent gains with basic resources and chemicals being the leaders. Moving onto European politics it is worth to take a look a the German Coalition topic aftermath. After CDU and SPD parties agreed on the coalition deal the voices saying that the Chancellor Merkel sold herself to the SPD arose. In the backlash Angela Merkel stated in an interview for ZDF television that she has ran for the four-year term and she is willing to serve the full term rebuffing critics saying that the party should look for a Chancellor’s successor. In today’s economic calendar we don’t have many releases scheduled for the European economies with Swiss and Portuguese CPI being the major ones. Swiss print showed a little slowdown in YoY terms coming out at 0.7% against 0.8% expected. After the first hour of trade the German DAX (DE30) has traded 2% higher, the French CAC 40 (FRA40) 1.5%, whilst the UK FTSE 100 has gained 1.35%.
DE30 struggles at the 12355 pts mark.
After huge drop on Friday sent DE30 into the range of 11860-11990 pts support zone the benchmarks has rebounded closing the day with the bullish pin bar. In turn the beginning of the week sent prices towards the 12355 pts resistance level. In case the bulls manage to break above this handle a further rally towards 12645 mark and 200-session moving average lying above may be possible. However, ahead of this obstacles lies 8-session moving average that may prove to be a local resistance level. The scenario for bears might be bringing the price below 12100 pts support level and the repeated attack on the earlier mentioned support zone.
All the DAX components are trading higher on the Monday morning.
Deutsche Bank (DBK.DE) is one of the top movers among DAX components on the Monday morning. The improved sentiment towards the Bank may be accounted to the plans concerning reviving the equities unit. After revenue from the Bank’s prime brokerage services has been falling for 10 quarters already the company is seeking to restructure its equity derivatives unit. The Bank aims to achieve it through employment of young university graduates rather than experienced and expensive professionals. Moreover, in order to ensure effects of revival the Bank is seeking to develop “best-in-class electronic platform”. After the first hour of trade Deutsche Bank shares has traded 3.74% higher.
Deutsche Bank equity unit has been severely underperforming against its major peers in the recent years