DE30 erases gains and drops below 10,900 pts

• European equities erase gains after session launch

• DE30 pulls back below 10,000 pts

• BaFin investigated Wirecard's communication with investors

European equities launched a new week higher. However, after the opening of the European cash session, major indices started moving lower and now most of the benchmarks from the region trade under the flatline. 

ECB and Germany head for a legal clash?

Ursula von der Leyen, head of the European Commission commented on the recent German court ruling over the weekend. The politician stressed that the final word on EU law belongs to the European Court of Justice. Speaking of the 3-month ultimatum German court gave to the ECB, von der Leyen said that the bloc may sue Germany over this decision. It is highly likely that ECB will be able to continue to carry out its programmes but such a clash would undermine the integrity of the European Union. Keep in mind that Germany is the biggest EU economy and was often the most vigorous defender of bloc's rules.

Source: xStation5

DE30 turned lower after the opening of the European cash session. The index erased all of the gains made today and is trading below the flatline at press time. Important support zone to watch in case decline deepens can be found below the lower limit of the local market geometry (10,795 pts). Bulls will aim for closing today's candlestick above 10,900 pts - the 50% retracement of the big downward move that took place in February and March. Keep in mind that without any big macro or earnings reports scheduled for release today, indices may react more to the newsflow. Next round of EU-UK trade talks started today but it should not have much of an impact on equities. 

DAX members at 9:56 am BST. Source: Bloomberg

Wirecard (WDI.DE) responded to allegations of accounting fraud by appointing a Chief Compliance Officer to the Board. James Freis will take the post on July 1. Apart from that, Wirecard decided to make reshuffles in responsibilities of the other Board members. In the other news, BaFin, the German financial watchdog, said that it will carefully review Wirecard's communication with investors ahead of KPMG audit release. The move is part of a probe into suspected manipulation of Wirecard stock. 

Bernd Leukert, head of technology at Deutsche Bank (DBK.DE), said in an interview with FAZ that companies have a lot of potential to cut costs in travel expenses. He said that Deutsche Bank itself will probably limit travel expenses after Covid-19 pandemic ends. The German lender may also achieve cost savings on office space expenses as more employees are expected to start work from home in the future.

Lufthansa (LHA.DE) will resume flights to over 100 destinations in June.

Share price of Wirecard (WDI.DE) retested March's low last week. The stock opened today's session significantly higher but those gains are being erased. €80 area is key and final support. In spite of striking multiple deals with smaller and bigger companies, sentiment on the stock has been dominated by reports of accounting misconduct in recent months. Source: xStation5