Summary:
- EU member countries likely to discard money-laundering list in two weeks
- DAX (DE30 on xStation5) broke to new 2019 high
- BMW (BMW.DE) and Daimler (DAI.DE) signed memorandum of understanding to develop technology together
Equities in Asia rose today thanks to more trade optimism. Steep advance was spotted in China following news that MSCI wants to boost Chinese share in its global indices significantly. In response, stock markets from the Old Continent opened in green. Gains were seen all across the continent with German and Polish equities outperforming the most in the first minutes of trade. Personal goods companies and carmakers were among leaders while telecoms took the biggest step back.
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DE30 (DAX futures underlying) finally managed to break above the 11560 pts handle and distance further away from the recently broken downward sloping trendline. The index is trading at YTD highs and may be set to tako on 4-month high around 11682 pts in the days to come. The resistance zone ranging above 11800 pts handle can be seen as the first level to watch for bulls while breakout level of 11560 pts could be the nearest support level. Source: xStation5
Some time ago reports surfaced saying that the European Commission drafted a blacklist of money laundering countries. Among countries on the list one can find, for example, Saudi Arabia as well as 4 territories being under the United States oversight. As one can see approving the list by the EU members could seriously deteriorate relations with some of the bloc’s major partners. Such view seems to be also expressed by the Saudi king, Salman, who sent letter to every EU leader asking to reconsider including his country on the list. The United States also expressed concerns over inclusion of some of its territories. Given that skirmish with the US over the issue could provoke the world’s biggest economy to take bolder approach towards the EU in terms of tariffs and that Saudi Arabia is a major importer of the European goods, it should not come as surprise that some EU members opposed the list. In fact, unofficial reports claim that over 20 countries already oppose the list. It means that the list is likely to be discarded in two weeks when the vote is held as consent of at least 21 EU members is needed to do it. The European Commission will held meeting with experts from each member country today to get understanding of each country’s position.
Elsewhere, what was rumoured for some time already got confirmed today in a Reuters poll. Economists surveyed by the news agency do not expect the European Central Bank to increase borrowing costs this year for the first time. Survey respondents grew increasingly concerned that the ECB may have missed its chance to normalize policy and now may need to offer more expansionary tools in order to support economy at times of looming slowdown. However, at the same time economists do not expect ECB to communicate official shift in rate guidance during its meeting next week (6 March).
Major European stock market indices after the first hour of trade:
- DAX (DE30): +1.17%
- FTSE 100 (UK100): +0.65%
- CAC40 (FRA40): +0.73%
- IBEX (SPA35): +0.61%
- FTSE MIB (ITA40): +0.58%
Gains are seen all across DAX quotation board on Friday. Companies from the German automotive sector can be found among leaders today. Source: Bloomberg
Company News
Everything seems to hint that electric and autonomous vehicles will be the future of the automotive sector. Volkswagen (VOW.DE) and Ford Motor (F.US) formed an alliance some time ago aimed at getting ahead of competitors. However, it seems that Ford and is are not the only ones that think it is better to cooperate than compete. Two German carmakers, BMW (BMW.DE) and Daimler (DAI.DE), signed a memorandum of understanding yesterday to develop high-profile driverless technology. As both companies had similar views on the future of mobility such a move can result in cost savings as companies will not overlap in R&D expenses. All German carmakers experience decent gains today.
Airbus (AIR.DE), the biggest European planemaker, is said to be mully enhancing its production plant in China. According to the Bloomberg report, the company considers adjusting Chinese production plant to assembling A33neo jet models. A move is said to be reasoned by an attempt to win more customers in the region that experiences the fastest growth of the aviation market. However, the employee that hinted media on the move said that nothing is certain yet and cautioned that the whole plan may not win approval of company’s management.
Airbus (AIR.DE) is a perfect example of how great ongoing recovery on the global stock markets is. The aircraft manufacturer is trading over 36.5% higher YTD and on the highest level in history. Note that 50- and 200-session moving average look to be set to paint a bullish signal - golden cross. Source: xStation5
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