DE30 reached a 4-month low below 15,000 pts

• European indices trade lower

• DE30 reached a 4-month low below 15,000 pts

• BMW boosts full-year profit margin guidance

Stocks in Europe are following into footsteps of US and Asian peers. Declines can be seen all across the Old Continent. Majority of blue chip indices from Western Europe trade 0.5-0.7% lower on the day. Swiss SMI is a top laggard, dropping over 1%, while Polish WIG20 can be seen as an outperformer as it trades flat.

CPI inflation data for September from the euro area was released at 10:00 am BST. While the median estimate pointed to an acceleration from 3.0% to 3.3% YoY, the market was actually bracing for a higher reading, given beats in inflation data from member countries. It was confirmed with actual data showing an acceleration to 3.4% YoY. Core gauge accelerated from 1.6 to 1.9% YoY, in-line with expectations. As CPI was expected to accelerate significantly, there was almost no reaction to the data release. 

Source: xStation5

DE30 is yet to make a decisive break below the lower limit of the Overbalance structure at 15,200 pts. The index dropped below this hurdle today but the downward move was later halted at the 200-session moving average (purple line, 15,000 pts area). This was the first test of this moving average in almost a year and bulls managed to defend the area. Subsequent recovery allowed the index to recoup a big part of today's losses. The key level to watch today is the aforementioned 15,200 pts. Breaking above may hint that recovery is on the cards. On the other hand, plunging back towards the 15,000 pts mark and finishing the day there may encourage bears to become more active next week. The aforementioned moving average looks to be a key support guarding the uptrend.

Company News

BMW (BMW.DE) boosted its full-year profit margin forecast. German carmaker expects its profit margin to reach 9.5-10.5% this year, up from a previous guidance of 7-9%. Automotive segment is expected to generate a free cash flow of around €6.5 billion while return on equity in the financial services business is expected to reach 20-23%, up from previous guidance of 17-20%. BMW said that semiconductor shortage remains an issue and that forecast boost is backed with price hikes.

Siemens Energy (ENR.DE) and General Electric settled a lawsuit over gas turbines. General Electric accused Siemens Energy of stealing gas turbine trade secrets. Terms of the settlement were not disclosed to the public.

Deutsche Bank (DBK.DE) plans to reduce the number of retail branches in some European countries. The German lender will focus on a smaller number of branches in key locations that will serve wealthy clients. The restructuring will first take place in Spain, later in Italy and Belgium. 

Airbus (AIR.DE) has signed a memorandum of understanding with Italian ITA. ITA will buy 28 jets from Airbus with the first aircraft of a new fleet expected to start flying in Q1 2022. 

In spite of announcing a deal with Italian ITA, shares of Airbus (AIR.DE) trade lower today. Stock of the European planemaker launched today's trading lower but has managed to recover from daily lows. As a result, a pin bar pattern was painted near the lower limit of recent trading range, a development that may hint at a looming upward move. Source: xStation5