DE30: Rally resumes after Fed action and stimulus rumours

• Stocks jump on Fed actions and stimulus rumours

• DE30 nears 200-hour moving average

• TUI (TUI.DE) surges on 2020 summer plans

European stock markets and US futures are rallying following a solid session in Asia. Investors seem to be looking past geopolitical developments on the China-India border and the Korean Peninsula. More bond buying from Fed and rumours on another big stimulus package in the United States are fuelling today's recovery.

ZEW indices for June were released at 10:00 am BST. German expectations sub-index jumped from 51 to 63.4 (exp. 60). This an improvement but current situation sub-index remains at very depressed levels - it has moved from -93.5 to -83.1 in June (exp. -82). The reading confirms that we are still far off "normal" but at the same time it is widely believed that we will get there rather sooner than later.

Source: xStation5

DE30 reacted halted yesterday's decline at 61.8% retracement of February-March sell-off and climbed back into the Overbalance structure later on. Index retested high from June 12 (12,150 pts) as a support today and continues to move higher. 200-hour moving average (purple line) is the resistance to watch for now. Overnight surge was halted just slightly below it and DE30 looks to be gearing up for a test. Investors should keep in mind that there are two potential risk events scheduled in the afternoon - US retail sales (1:30 pm BST) and Powell's testimony (3:00 pm BST). Both could cause a pullback on the indices and given current technical landscape, the resulting correction could be a deeper one. Erasing recent gains and falling back to the 61.8% retracement (11,600 pts) would be a big warning signal for bulls.

DAX members at 11:24 am BST. Source: Bloomberg

At the start of yesterday's cash session all DAX members were trading lower. Situation today is completely different - everyone is trading higher! Expansion of the Fed bond buying programme, easier approach towards Huawei as well as rumours on the next major US fiscal stimulus are keeping stock markets higher today. Cyclical stocks can be found among leaders.

BaFin, the German financial watchdog, said on Monday that it suspects shares of Infineon (IFX.DE) are being offered publicly illegally. Watchdog said that it is aware of shares being offered to the public without issuing prospectus by an unknown source that uses Infineon's logo. Infineon confirmed that it has received questions from retail investors last week on sales of company's shares by some other parties. However, Infineon said that those offerings were made without the company's consent. Failure to issue offering prospectus can result in a fine of up to €5 million in Germany.

Lufthansa (LHA.DE) offered more details on the planned reduction of 22,000 jobs. The German carrier wants to strike collective crisis agreements by June 22. Company said that all segments and subsidiaries are facing prospective job cuts.

TUI (TUI.DE) is surging today. Travel company announced that it plans to partially restart the 2020 summer schedule. The company plans to open around half of its hotels starting from July. Further re-openings are conditioned on easing of Covid-19 restrictions. TUI said that it has sold 25% of 2020 summer capacity and that average price was 14% higher than last year.

Share price of TUI (TUI.DE) jumped above the 50-hour moving average at the launch of today's session. Stock has been testing this hurdle as a support during the session but bulls managed to hold price above it. Near-term resistance zone ranges around €6.25. Source: xStation5