DE30: European indices give up early gains

• European stocks open higher but erase gains later on

• DE30 pulled back to 11,000 pts after storming above 11,300 pts overnight 

• Deutsche Boerse (DB1.DE) with strong results as market volatility spikes

Stock indices in Europe launched the day higher as investors stayed upbeat on Remdesevir news. However, indices headed lower after the start of the European cash session with DAX pulling back to trade flat on the day. Big events and data releases scheduled for today include Italian GDP (10:00 am BST), euro area GDP (10:00 am BST), ECB decision (12:45 pm BST) and US jobless claims (1:30 pm BST).

German economy loses 373k jobs in March

The Federal Employment Agency released data on German unemployment change in March. Report showed unemployment rising 373k against an expected increase of 74.5k. Unemployment rate jumped from 5% to 5.8% (exp. 5.2%). Total unemployment in Germany increased to 2.64 million. The Agency also said that registrations for a short-time work scheme are at levels never seen before and that demand for new employees collapsed. However, it is expected that due to broad adoption of short-time working plans, unemployment increases will not be as big in the months to come.

Source: xStation5

DE30 smashed through 10,810 pts handle and 50% retracement of February-March drop yesterday. The index surged to as high as 11,340 pts in the overnight Asian trade! Downward move that occured between March 25 and April 1 remains the largest correction within the current upward impulse. Using it as a guide, we can see that key support - lower limit of the Overbalance structure - can now be found slightly above 10,500 pts handle. The near-term ranges between 10,810 pts and 50% retracement (10,890 pts) support zone  Stocks pulled back today in the morning showing that yesterday's euphoria may have been somewhat overblown. Traders should focus on hard data - European GDP and US jobless claims - as well as ECB decision. Note that today is the final trading day of the month therefore funds may decide to  rebalance and boost trading volumes in turn.

DAX members at 9:31 am BST. Source: Bloomberg

BASF (BAS.DE) reported Q1 earnings today. The German chemical company reported EBITDA of €2.58 billion, marking 2% YoY decline. EPS dropped 20% YoY to €1.36. Revenue increased 7% YoY and reached €16.75 billion - 11% above Bloomberg median estimate. Q1 net income stood at €885 million, 37% lower than a year ago. BASF expects significant sales drop in Q2 followed by slow recovery in the second half of the year. Company abandoned 2020 outlook.

Annual General meeting of Munich Re (MUV2.DE) shareholders approved a €9.8 dividend yesterday. Shareholders also backed Joachim Wenning, Chief Executive Officer, with 99% support. However, Munich Re is trading lower today and it can be ascribed to some downbeat comments made by the CEO. Wenning said that weakness of the capital market poses a challenge for the company. He also warned that pandemic costs will be substantial. Similar comments were expressed by Oliver Baete, CEO of Allianz (ALV.DE) in a recent interview.

Deutsche Boerse (DB1.DE) is trading higher following the release of Q1 earnings. EBITDA jumped 30% to €619.8 million while net revenue jumped 27% to €914.8 million. German stock exchange operators benefited from a spike in volatility in Q1 2020, that encouraged investors to become more active. Deutsche Boerse left 2020 outlook unchanged - revenue is expected at around €1.2 billion.

Deutsche Boerse (DB1.DE) has almost fully recovered from the February-March sell-off. Solid results announced today pushed the stock higher. Resistance zone ranging above the 78.6% retracement (€145) is being tested at press time and in case it is cleared, share price could attack pre-crisis highs. Note that volatility on the market remains elevated in Q2 compared to pre-crisis times therefore Deutsche Boerse may be heading for another strong quarter. Source: xStation5