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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

DE30: DAX struggles to hold on to key support zone

12:57 28 April 2023
  • DAX tests weekly lows

  • Attention focused on inflation reports from Germany and the US

  • Covestro gains on wave of quarterly results

The last trading session of the month is relatively nervous. Investors cannot find a common direction, which is mainly due to the uncertainty surrounding the CPI (HICP) inflation reports from Germany and PCE from the USA scheduled for today. Let us remember that the most important macro event of the month, the FOMC's interest rate decision, awaits us this Wednesday. This meeting is important as it will most likely indicate whether Wednesday's hike will be the last in the ongoing cycle. Nevertheless, the spectre of recession also remains an important factor, which is being assessed in the market through the prism of the future performance of listed companies.

Germany's Q1 GDP report disappoints

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The preliminary German GDP report for Q1 2023 was published at 09:00 am BST today and proved to be a disappointment, with the German economy neither growing nor contracting in the first three months of the year (0.0% k/k). However, the market was expecting growth of 0.2% k/k. Following the publication, DAX futures (DE30) retreated and the EUR lost against the US dollar.

The mood in Europe during Friday's trading session is relatively mixed. Markets cannot find a common direction after a weak start to the week and an attempt to erase some of the losses during yesterday's session. Source: xStation 5

What will the inflation reading from Germany show? 

The analyst consensus is that the inflation reading will show a decline in the growth rate of goods and services prices compared to the previous month as well as last year. Importantly, however, for both the m/m and y/y CPI readings, the standard deviation of analysts' predictions is close to 0.25%, which is large enough to increase the likelihood of a surprise in today's reading. Source: Bloomberg       

News: Covestro gains after results, HelloFresh upgraded by Barclays

Covestro (1COV.DE) gains 5% on the back of strong quarterly results and news of a share buyback. The mood is also supported by a raised full-year outlook. Today's results surprised analysts, who had assumed that the start of 2023 would be challenging for Covestro's business. 

Details of the company's quarterly report. Source: Bloomberg

HelloFresh (HFG.DE) shares are also doing relatively well, gaining on the wave of a raised recommendation from Barclays. The British bank rated the company's shares 'overweight' and raised its target price for the company's shares by 36% to €35 per share.            

Covestro is breaking out above the upper barrier of the consolidation zone and opening a path towards the resistance set by the 23.6% Fibo retracement of the upward impulse initiated in September 2022. Source: xStation 5

Technical analysis of the DE30: Index retreats to weekly lowsDespite a strong rebound during yesterday's session on the Old Continent, today the benchmark of the largest German companies is once again under downward pressure. DE30 futures are currently slipping towards weekly lows, driven mainly by the uncertainty surrounding the German and US PCE inflation readings scheduled for today. Readings lower than expectations could support the demand side, which is trying to defend weekly levels. Source: xStation 5  

 

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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