DE30 pulls back after failed attack on 13,000 pts

• Stocks slide after mixed data from China

• DE30 pulls back after failed attack on 13,000 pts

• German Supreme Audit Institution to probe BaFin and Finance Ministry

Stocks in Europe are trading lower on Thursday. Q2 GDP data from China showed Chinese economy returning to growth in year-over-year terms. However, monthly production and retail sales data for June showed that while supply side recovered, demand remains below prior year's levels. US retail sales (1:30 pm BST) and ECB decision (12:45 pm BST) are top tier events to watch today.

Germany to launch BaFin and Finance Ministry probe

German Supreme Audit Institution (SAI) will launch an investigation into the German financial watchdog, BaFin, as well as the German Finance Ministry. Wirecard scandal is said to be the cause, according to Spiegel's interview with SAI chief. SAI will look into why BaFin ignored evidence of Wirecard's wrongdoing. Moreover, SAI will also investigate how Bafin and the Finance Ministry reacted to hints of accounting frauds at Wirecard.

Source: xStation5

DE30 rallied yesterday and managed to print a fresh post-pandemic high just a notch below the psychological 13,000 pts mark. The index retraced to the previous highs afterwards and continues to trade within the price zone ranging below 12,835 pts. Should bears manage to bring DE30 below this price zone, deepening of the downward move could be on the cards with 12,650 pts swing level being the first target to watch. Note that the 200-hour moving average (purple line) runs in the same area. Today's ECB decision is likely to be a non-event for equities as the Bank is widely expected to stay on hold. However, US retail sales data could be a mover for stock markets, especially as it will be released at the same time Christine Lagarde will start a post-meeting press conference. 13,000 pts area is the first resistance to watch should we see a recovery from morning declines.

DAX members at 10:15 am BST. Source: Bloomberg

European Automobile Manufacturers' Association released the latest data on European automotive market at 7:00 am BST today. Car registrations in 27 EU countries dropped 22.3% YoY in June, to 0.95 million units. Volkswagen Group (VOW3.DE) saw its car sales drop by 25.9% with the biggest declines in Volkswagen and Seat brands. Sales of BMW (BMW.DE) dropped 26.3% YoY with 26.3% drop in BMW brand and 26.2% decline in Mini brand. Daimler (DAI.DE) registered the smallest drop of 19.2% YoY. While Mercedes brand experienced 11.6%, Smart brand saw sales drop by 83%.

According to a Financial Times report, Markus Braun, founder and ex-CEO of Wirecard (WDI.DE) borrowed €35 million from Wirecard's banking arm. While the loan was fully repaid by Braun in mid-March, questions were raised whether the German payments company should notify the regulator about the loan. Moreover, Financial Times claims that members of Wirecard's supervisory board were not informed about the loan until after it was paid out to Braun. The report is exerting some pressure on Wirecard's shares today as it highlights another questionable practice at the company.

Deutsche Bank (DBK.DE) decided to locate a new executive team of its Asian division in Singapore. Previous CEO and other top Asian executives were located in Hong Kong but the city has fallen out of grace due significant political risks.

Daimler (DAI.DE) reached the upper limit of its recent trading range yesterday. The stock seems to struggle with breaking above it and risk of a pullback increases. In such a scenario, the lower limit of the range at €35 will be the first target. Source: xStation5