DE30 surges and tests 13150 pts on trade headlines

• European equities trade higher on optimistic trade reports

• DE30 tested lower limit of recently-broken consolidation range

• Airbus (AIR.DE) wins $7.1 billion order from United Airlines Holding (UAL.US)

European stock markets trade higher today thanks to better-than-expected services PMIs as well as optimistic trade comments. European equities try to recover from two days of heavy selling. 

Services PMI indices for November were the only European data scheduled for release today. Data from Spain turned out to be a positive surprise as it jumped to 53.2 pts from 52.7 pts (expected 51.9 pts). On the other hand, data from Italy disappointed significantly as the index declined to 50.4 pts from 52.2 pts. Revised data from France and Germany was mixed as well as the former was revised lower to 52.2 pts from 52.9 pts, and the latter saw a small upgrade (51.7 pts vs 51.3 pts). In turn, services PMI for the whole euro area was revised higher to 51.9 pts from 51.5 pts.

Source: xStation5

DE30 jumped significantly higher following Bloomberg report saying that the US and China are getting closer to the trade agreement. The German index tested the lower limit of the recently-broken consolidation range at 13150 pts. A break back above could hint at a resumption of a sideways move in the 13150-13300 pts range. In case optimism wanes, the support at 13050 pts could come into play. Traders should stay on guard as markets are driven primarily by trade headlines this week. When it comes to Germany, it should be noted that Trump is scheduled to meet with Merkel at 12:30 pm GMT. Trump warned that Germany may face a trade action unless it boosts its defense spending. As the meeting will take place on the sidelines of NATO summit, the topic is likely to be raised.

DAX members at 9:37 am GMT. Source: Bloomberg

SAP (SAP.DE) executive Klein said that the company will end M&A activity for some time and focus on organic growth. The German software company will considers integration of acquired businesses as a key for the future.

Airbus (AIR.DE) continues to benefit from grounding of Boeing 737 MAX jets. United Airlines Holding (UAL.US) said it has ordered 50 Airbus’ A321XLR jets as a replacement for its Boeing 757-200 aircraft. The order is worth $7.1 billion. 

Allianz (ALV.DE) received a downgrade at Barclays. The Bank lowered recommendation for the German insurer to “equal-weight” from “overweight”. Price target was set at €232, implying an 8% increase against yesterday’s closing price.

Rally on Allianz (ALV.DE) shares was halted at the 127.2% exterior retracement of the downward correction started in mid-July. Share price slipped around 6% over the past four weeks, mimicking poor performance of the broad market. However, a rebound can be spotted today as the stock is climbing back above the 78.6% Fibo level (€213.50). The next resistance in line can be found at €219. Source: xStation5