Stock markets pared post US CPI slump
DAX (DE30 ) breaks above resistance level at 12355 pts
Deutsche Telekom (DTE.DE) about to modify its 4-year strategy
European stocks followed into their US and Asian peers footsteps posting gains during the opening as the optimism spread across the globe. Chancellor Angela Merkel promises to maintain balanced budget. Deutsche Telekom is about to develop new 4-year strategy.
In the aftermath of the yesterday’s better-than-expected US inflation print major US and European stock benchmarks dipped severely. However, equity traders saw this as an apparent buying opportunity. The initiated surge not only managed to pare post-data losses but also made Wall Street indices post significant gains by the end of the session. Dow Jones (US30) gained 1.03% while S&P 500 (US500) and Nasdaq (US100) moved 1.34% and 1.86% higher respectively. Later on, upbeat moods have spread to the Asia where all of the major stock benchmarks posted massive gains. Japanese Nikkei (JAP225) surged 1.47% despite continuation of yen strengthening. Australia’s S&P/ASX 200 (AUS200) moved 1.16% higher in presence of equivocal employment data. Chinese stocks continued to surge with Hang Seng CE (CHNComp) posting another stellar gain of 2.24%.
European stock markets opened higher amid optimism seen on other continents. All the major benchmarks from the region are green on the opening. Basic resources and industrial goods companies are leading the gains in Europe. On the other hand, food and beverage stocks underperform severely. In Germany Chancellor Angela Merkel stress that CDU will not allow budget deficits to happen in her newly forming government with SPD. Moreover, she stressed that her party is willing to fulfill promise of the balanced budget. Looking at the calendar we had some semi important macro releases from European economies in the morning. French unemployment rate fell from 9.6% to 8.9% in the Q4 2017 while the Spanish CPI beat estimates of 0.5% YoY coming out at 0.6% YoY. After the first hour of trade the German DAX (DE30) has traded 0.65% higher, the UK FTSE 100 (UK100) has gained 0.5%, whilst the French CAC 40 (FRA40) has surged 1.3%.
DE30 struggles in the vicinity of 8-session moving average.
Taking a look at the DE30 daily chart one can see that yesterday’s slump following US inflation data release was stopped a notch below 12100 pts mark. Benchmark pared losses later on and managed to post decent gains. However, the upward move was limited by the 8-session moving average. Today’s DE30 opened slightly higher yet it still struggles in the vicinity of the 8-session moving average. Breaking above this handle may provide support for the German bulls and in turn may result in an attack on the resistance level at 12645 pts. The case for bears may be closing daily candlestick beneath support level at 12355 pts.
Deutsche Telekom (DTE.DE) is posting minor gains in the morning.
Deutsche Telekom (DTE.DE) is a stock worth highlighting as we had some key remarks from the company’s management. Tim Hoettges, Deutsche Telekom CEO, confessed that the company is lagging in terms of digitalization against its major competitors like KPN or Telenor. Hoettges stated that the small amount of digital tools is an issue in all company’s departments. To be more competitive Deutsche Telekom is about to modify its 4-year strategy. The changes will result in cutting human-resources costs and speeding up networks with saved money. After the first hour of traded Deutsche Telekom has traded 0.1% higher.