DE30 revisits upper limit of trading range

• Stocks rally as Powell is ready to do more

• DE30 tests upper limit of trading range

• Daimler (DAI.DE) to re-halt production at Alabama factory

Global stock markets ignore Sino-US tensions and rise after Powell signalled he will not hesitate to stimulate the economy further if needed. There is one thing when it comes to European recovery rally that some people may have already forgotten - short-selling bans were put in place in some countries after the February-March market meltdown. Bans in Belgium, France, Greece, Spain and Austria will expire today and decisions not to renew them were taken. Traders should keep in mind that it may magnify selling pressures should an unfavourable event occur.

EU-UK trade deal still seems to be far away

Another round of trade talks between EU and UK negotiators were held last week and both sides said over the weekend that it was disappointing. Some kind of a progress is said to be reached when it comes to short-term migration or recognition of UK qualifications in the EU. However, some contentious issues, like for example access to UK fishing waters, remain. According to the Guardian report, the UK plans to present a draft trade agreement in order to prompt progress in talks. One needs to keep in mind that time is of the essence as current agreement states that any extension of transition period beyond 2020 needs to be agreed on prior to July 1. Talks are set to restart in June so negotiators will have only one month to prevent EU-UK trade relationship to be held on much tougher rules.

Source: xStation5

Strong downward move that DE30 experienced in the previous week brought the index to the lower limit of the recent trading range at 10,250 pts. Subsequent, quick rebound made the index revisit the upper limit of the range today. DE30 is testing a crucial resistance zone at 10,750 pts. Note that this time this zone is additionally enhanced by the downward trendline drawn with highs of recent false breakouts. Given that Sino-US tensions are heating up and the market seems to be overly complacent over monetary and fiscal stimulus, there is a high risk of a correction. Support at 10,575 pts will be the first one to watch in case a pullback starts. There are no key readings scheduled for release today therefore trading is likely to be dominated by headlines.

DAX members at 10:09 am BST. Source: Bloomberg

Stock markets caught a bid following Powell's pledge to boost easing if needed. Usual risk-on trades are benefiting the most - car makers, industrials and techs are in the lead.

The Bundesliga is back! Games will be played without a live audience for some time so football clubs and their financial results will not come back to normal soon. However, investors seem to be delighted with the fact that the ball is back in the game - shares of Borussia Dortmund (BVB.DE) are trading over 5% higher today. Borussia won with Schalke on Saturday in the first game after the Bundesliga was resumed.

Daimler (DAI.DE) decided to re-halt production at a US production plant in Alabama. Decision comes as the car maker faces delays in parts shipments from Mexico. Note that trading rules in North America forbid Daimler from circumventing the situation and importing car parts from elsewhere, unless it is ready to pay high tariffs. Mexican companies are allowed to restart production this week.

Deutsche Telekom (DTE.DE) is in talks with SoftBank Group over the latter's stake in T-Mobile US. Purchase would boost the stake of the German company in US telecom to above 50%. Deutsche Telekom currently holds 44% stake while SoftBank Group holds almost 25%.T-Mobile is currently valued at around $120 billion. 

Daimler (DAI.DE) broke below the upward trendline at the beginning of the previous week. However, the stock found support at the price zone ranging around €27.25 and started recovery later on. Share price is testing two important moving averages at press time - 50-hour (green line) and 200-hour (purple line). Key resistance zone lies slightly above them (€30). Source: xStation5