Summary:
- Von der Leyen hopes US-EU conflict will be resolved without imposing car tariffs
- DAX (DE30) seems locked in between short-term support and resistance levels
- Deutsche Bank (DBK.DE) to increase investment to the Asian unit
Bears are dominating in the first half of Wednesday’s European session. Declines are seen all across the Old Continent with just a few exceptions. Equities from Switzerland and the Netherlands can be considered such exceptions as stock market indices from the two countries are trading higher today. On the other hand, Russian equities are underperforming the most followed by stocks from Portugal and Austria.
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DE30 trades in between the 23.6% and 38.2% Fibo levels of the downward move that took place in May. Given numerous tests of the aforementioned hurdles (orange circles), one may consider them support and resistance levels to watch over the short-term. The index is trading close to the upper limit of the trading range (38.2% Fibo) and in case a break higher is delivered, bulls may eye for a 200-hour moving average (purple line on the chart above). Source: xStation5
Von der Leyen hopes US-EU conflict will be resolved without imposing car tariffs
Ursula von der Leyen won support of the European Parliament during yesterday’s confirmatory vote and became the new leader of the European Commission. The former German defense minister said after the vote that she hopes that the United States will not impose tariffs on the EU car sector. She will try to remind the US how much interests of the transatlantic allies are interrelated and that it is better to cooperate rather than fight. However, the US wants EU to increase purchases of agricultural products in order not to risk imposition of car tariffs. It should be noted that within the EU there is a huge degree of protectionism towards farmers therefore comforting the United States could risk deteriorating situation of the European farmers. Nevertheless, avoiding car tariffs is crucial for the European Union as such levies could deal a serious blow to the European economy, which is already balancing on the verge of the recession. However, we will have to wait for any “official actions” of von der Leyen as she will formally take the post in November.
DAX members at 9:47 am BST. Source: xStation5
Company News
Deutsche Bank (DBK.DE) is gaining today due to its plans in Asia. Werner Steinmueller, Deutsche Bank executive for the Asia-Pacfic region, said in an interview with the South China Morning Post that the German lender is increasing investment in China and Australia. The moves are part of an effort to strengthen the corporate and wealth management division in Asia. Steinmueller also said that the effect of withdrawing from equity trading in Asia in terms of job losses would be minimal.
Shareholders of Daimler (DAI.DE) are said to be opposing planned move of former-CEO Dieter Zetsche to company’s supervisory board. Zetsche stepped down as CEO in May 2019 and was about to take a 2-year long hiatus before becoming company’s Chairman in 2021 (German regulator requires such hiatus). However, his return to the supervisory board has been put under question along with the emergence of Handelsblatt report. The newspaper reported that some of the Daimler’s “large” shareholders do not see return of Zetsche as an option.
Car makers as a group trade lower today due to disappointing European car sales data. According to the data published by the European Automobile Manufacturers’ Association, sales dropped 7.9% YoY to 1.49 million cars in June, marking the biggest monthly drop since December 2018. The biggest declines were seen in Spain and France while Germany and UK fared slightly better. Source: Bloomberg
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