DE30: European equities ignore poor PMI readings

• European markets surge, S&P 500 futures hit upper trading limit

• DE30 breaks above the upper limit of the Overbalance structure

• HeidelbergCement (HEI.DE) had a great start to the year before coronavirus outbreak

European stocks launched today;s trading significantly higher in a late reaction to yesterday’s Fed announcement. There is also hope that US lawmakers will agree on the coronavirus relief package today. Release of disastrous PMIs earlier today caused a small pullback on European stock markets but major indices managed to recoup much of that drop.

Germany plans to return to austerity policy once coronavirus crisis is over

Peter Altmaier, German Economy Minister, outlined plans of the German authorities for the post-virus era in an interview with public broadcaster ZDF. The politician said that his country plans to return to austerity policy once the coronavirus crisis is over, including balanced budget policy. Altmaier said that the country is committed to paying debt back from 2023. Let us recall that Germany will take on a new debt for the first time since 2013 in order to finance its €750 billion stimulus package.

Source: xStation5

The German DE30 finally managed to break above the upper limit of the Overbalance structure at 9150 pts after 4 days of a rocky rebound. A small pullback occurred after the release of French and German PMIs but the index managed to recover from that drop already. DE30 is trading at the highest level since March 13. Looking for potential resistance levels ahead, one should focus on limits of the short-term consolidation range from March 12 (9700 and 9940 pts). Traders should brace for elevated volatility at the opening of the US cash session (1:30 pm GMT) and during release of US PMIs (1:45 pm GMT). Apart from that, any news on US relief package talks may move the market.

DAX members at 10:17 am GMT. Source: Bloomberg

Dominik von Achten, CEO of HeidelbergCement (HEI.DE), said that the company has had one of the best starts to the year in history. Executive hailed favourable weather conditions as one of the reasons behind outperformance. However, von Achten also said that the coronavirus outbreak has changed quite a lot for the company. On one hand it was forced to close its plants in Northern Italy while on the other, lower fuel costs are likely to be beneficial for the company over the course of 2020.

Volkswagen (VOW3.DE) decided to temporarily halt production at two facilities in Mexico. The decision is reasoned with an attempt to limit the spread of the coronavirus. Production will be suspended from March 30 to April 12.

Thyssenkrupp (TKA.DE), the German industrial conglomerate, decided to withdraw profit guidance for 2019/2020. The company said that due to the downturn triggered by the coronavirus outbreak it is unable to provide reliable business forecasts for 2019/2020 financial year.

HeidelbergCement (HEI.DE) is catching a bid this week and bounces off the support zone at €31. The nearest resistance to watch can be found at €38.25 and is marked with price reaction from the 2009-2011 period as well as the upper limit of a bearish gap from the previous week. Should a break higher occur, bulls may look towards the zone at €45. Source: xStation5