The German DAX index is recording slight declines in the first part of the day, losing 0.25% to 18,650 points. However, the levels at which the index is currently positioned are close to historical highs, just below 18,900 points. The broader European market session is also relatively unchanged. The biggest gains are seen in indices in Spain, France, and Italy (0.20-0.30%), while the largest declines are occurring in Austria and Poland (0.80-0.90%).
Volatility in the first part of the day was partly limited by the fact that markets in Japan and China remain closed due to a holiday. However, as we approach the U.S. cash session opening, more significant moves are becoming visible. Today, we are particularly observing declines in the U.S. dollar, which is being sold off by investors anticipating the first interest rate cut at Wednesday's meeting.
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The German index is down 0.25% today, though this is minor considering the last three bullish sessions before the weekend. Currently, bulls need approximately a 1.00% of gains to retest the upper boundary of the consolidation channel at 18,900 points. This level has been tested multiple times in recent months, and a decisive break could indicate potential for much larger gains. On the downside, the key support level to defend is around 18,400 points.
Company News
Volkswagen (VOW1.DE) is down 1.00%, and investor sentiment toward the German automaker remains unfavorable. Volkswagen expects an equally challenging second half of 2024 after a relatively good first half of the year. "We are aware that many markets are currently cooling," said Carsten Intra, CEO of Volkswagen Commercial Vehicles, at the IAA Transportation trade fair in Hanover. "The second half of the year will be difficult."
Rexel (RXL.FR) shares are up more than 10.00% on Monday after the company announced it had rejected a takeover offer of around $9.4 billion from billionaire Brad Jacobs' company QXO (QXO.O). The offer valued the company at between 28.00 and 28.40 euros per share, compared to the current price of around 25.20 euros, and was deemed by Rexel's board to undervalue the company.
UniCredit (UCG.IT) CEO Andrea Orcel has expressed support for a merger with Commerzbank (CBK.DE). According to Orcel, the merger of the two banks could create significant added value for all stakeholders and result in a much stronger competitor in the German banking market. The institutions have little overlap, and this would create a bank that "complements each other well geographically and is very well-balanced in terms of retail and corporate business."
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