DE30: Lufthansa surges on state rescue rumours

• Stocks pullback amid China-US tensions

• DE30 tries to break below 11,100 pts

• Lufthansa (LHA.DE) reportedly reached deal with German government

European indices are trading lower on Thursday. Equity benchmarks seesawed following the release of German and French PMIs but ultimately turned lower and deepened decline. Some important US data reports will be released in the early afternoon but markets' attention is focused on China-US relations.

Source: xStation5

DE30 is trading under pressure today. The index broke to a fresh 3-week high yesterday but those gains were erased during overnight trade. Bulls are currently trying to stop the index from making a bigger drop below 11,100 pts. Note that this handle is not only marked with previous price reactions but also with a 50-hour moving average (green line). Price zone ranging around 11,100 pts is an area to watch today. US jobless claims at 1:30 pm BST and US PMIs at 2:45 pm BST may provide some additional volatility. Apart from that, tracking tweets from US President Trump is a good strategy given China-US tensions are on the rise. Should a bigger downward move occur later today, a lot will depend on whether bulls manage to defend the psychological 11,000 pts mark.

Volkswagen (VOW3.DE) is trading within an upward channel since the start of April. However, the stock is making a lot of false breakouts from the channel (orange circles). These could be seen as investing opportunities. However, one should keep in mind that the mid-term trend is upward therefore taking short positions is a more risky play. Currently stock is pulling back from the upper limit of the channel. Source: xStation5

Deutsche Lufthansa (LHA.DE) is one of a few DAX members that trade higher today. The German carrier benefits from reports saying that it has agreed on a rescue package with the German government. According to a Handelsblatt report, German government will take a 20% direct stake in the company and another 5% through convertible debt. However, neither Lufthansa nor German government confirmed that a deal was reached (Lufthansa confirmed it is in advanced talks with the government). Lufthansa stock is trading almost 6% higher today.

Christian Sewing, CEO of Deutsche Bank (DBK.DE), assured investors during the annual shareholder meeting that the Bank is in good financial shape. Sewing plans to continue to look for cost reductions and said that working from home could play a role in that. As the coronavirus pandemic proved that it is possible for most of Bank's employees to work from home, Deutsche Bank will reconsider whether it needs to rent as much office space as it used to.

Volkswagen (VOW3.DE) attracted some bad publicity earlier this week. Company was accused of racism after airing a new Golf commercial on its Instagram. German carmaker responded by withdrawing the video and promising to investigate how it all happened. Company said it is very sensitive to such claims due to its origins during Nazi era and collaboration with then-German government.

Deutsche Bank (DBK.DE) continues recovery after bouncing off the lower limit of the Overbalance structure near €5.90 handle. A small pullback can be observed today but it should not be worrisome unless it breaks below the lower limit of local market geometry at €6.42 handle. Source: xStation5