Summary:
- Most of European equity markets trade pretty flat on Tuesday
- How low can the DAX go?
- Wirecard (WDI.DE) moves down on the first day after a short ban ends
The first post-Easter trading hours are bringing relative calmness across major European stock markets with the FTSE100 (UK100) being the sole index traded up (0.4%). It signals that Europe-based investors are not concerned with the yesterday’s Trump announcement pushing oil prices much higher. Keep in mind that if crude prices rise substantially and stay there for a longer period of time, it could act to the detriment of global economic growth. This aspect could be particularly important at a time when the global economy is stuttering. This is especially true when it comes to Europe seeing its production output shrinking notably at the turn of the year. Looking ahead, any economic recovery could depend on progress reached in trade negotiations between the US and China. Moreover, given the fact that monetary policy has reached its ceiling in many economies, more focus may be on fiscal stimulus.
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Technically the German DE30 is pulling down this morning after drawing a shooting star pattern on Thursday. Measuring the latest upward move one could arrive at a conclusion a pullback at least toward the 38.2% retracement may occur. Note that this level served as a springboard for bulls last week. Source: xStation5
After two hours of trading the British index is the best one which could stem from weakness seen in the pound. The currency is trading slightly below 1.30 against the US dollar as the government is continuing to hold talks with the Labour party. Sour moods could be a result of a lack of any material progress in order to break the current Brexit impasse. Let us remind that the UK has been granted a Brexit deadline extension till Halloween, but it could leave the EU in any time if the current agreement is accepted by the parliament in London. Keep in mind that simmering uncertainty is weighing on economic growth by a small number of new investments. Even as the UK has not left the EU yet, it has already incurred material costs with regard to this process.
The German DE30 is trading 0.15% lower this morning. Wirecard (WDI.DE) is leading the losses. Source: Bloomberg
Significant losses seen in Wirecard shares are coming in the first day after a short ban ended. Note that the stock was falling over 8% this morning, shortly after the open. Since then it has managed to erase some of these losses but remains the worst performing stock within the DE30.
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