DE30: Stocks rise in spite of German GDP contraction

• European stocks recover from yesterday' declines

• DE30 tries to hold above 10,500 pts

• Deutsche Boerse (DB1.DE) to look for acquisitions

Stocks in Europe are trading higher in an attempt to recover from yesterday's heavy declines.GDP report from Germany and euro area showed contraction as expected. However, the market did not take much of a note and continued to move higher. DAX is trying to hold above 10,500 pts. US retail sales data (1:30 am BST) may provide some volatility in the early afternoon.

German GDP contracts 2.2% QoQ in Q1 2020

German statistical office released the Q1 GDP report today. Data showed 2.2% QoQ contraction - in-line with market estimates. On an year-over-year basis GDP declined 1.9% (exp. -1.6% YoY). However, data adjusted for the number of working days showed a drop of 2.3% YoY (exp. -2% YoY). This was a preliminary release therefore details were not published. German stats office chief said that Q2 GDP is expected to drop by around 10%. German economy minister also commented on growth today saying that recession should have bottomed out in April but indicators do not give much hope.

Source: xStation5

While DE30 plunged significantly yesterday, the index did not manage to break below the lower limit of the trading range at 10,250 pts. Subsequent recovery allowed the index to break above 10,500 pts and now it is trying to extend gains even furthur. The first resistance to watch is a swing level at 10,750 pts. Bears will try to bring the index back below the midpoint of the range marked by 10,450-10,500 pts. The only big macro release left scheduled for release before today's US open is US retail sales data at 1:30 pm BST. It could provide some short-term volatility for USD and equities but macro releases were largely ignored by markets as of late and it may stay this way. When it comes to the US session, one should keep in mind that big moves/turnarounds were often started near European session's close recently (after 4:00 pm BST. Key support and resistance levels are marked by limits of the trading range - 10,250 pts (support) and 10,750 pts (resistance).

DAX members at 10:22 am BST. Source: Bloomberg

According to the Wall Street Journal, Fed has notified Deutsche Bank (DBK.DE) that it is concerned over its practices, mostly money-laundering controls. US central bank also said that Deutsche Bank did little to work out issues that led to its "troubled condition" status in 2017.

Chief Executive Officer of Deutsche Boerse (DB1.DE) said that acquisitions will play a big role in its new strategy. However, the strategy plan is expected to be unveiled in Q4 2020.

Commerzbank (CBK.DE) decided not to sell its Polish unit, mBank (MBK.PL). German lender does not see the sale as feasible on reasonable terms in current market conditions. Commerzbank holds 69.3% stake in the Polish bank.

German transport minister said that the government is in intensive talks with Lufthansa (LHA.DE) over state aid. However, he said that he is unable to tell when the results of talks will be known.

Deutsche Boerse (DB1.DE) made a retest of a support zone ranging above the 78.6% Fibo retracement of February-March drop. The stock is trading higher today and could be gearing up for a bigger upward impulse. In such a scenario, traders may expect some resistance to arise above €155 (ATH area). Source: xStation5