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European stock market start the day lower
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DE30 tests lower limit of the Overbalance structure
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Daimler (DAI.DE) reaches settlement in US emissions case
Stock markets in Europe started the day lower and deepened declines in the first hours of the cash session. DAX declines 1.2% while Spanish Ibex and French CAC40 are both trading over 2% lower. A set of disappointing monthly data from China was released overnight and it showed that demand remains subdued in the post-pandemic world. Release of US retail sales data at 1:30 pm BST is a potential risk event for equities.
Revision of Q2 GDP data from the euro area was not a surprise. The reading showed a 12.1% QoQ contraction, just as signaled by preliminary release. However, GDP report from Poland showed a smaller than expected drop in economic activity. Q2 GDP dropped by 8.9% QoQ against an expected 9.6% QoQ decline.
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DE30 has pulled back to the support at 12,820 pts, where the lower limit of the Overbalance structure can be found. Breaking below this hurdle can be considered a bearish signal. Next support in line can be found at 50% retracement of late-July correction (12,750 pts). Traders should watch out for elevated volatility near US retail sales data release (1:30 pm BST). Source: xStation5
Daimler (DAI.DE) has reached settlement with the US Justice Department in the diesel emissions case. The German carmaker has agreed to pay €1.27 billion to authorities and another €592 million to settle lawsuits from consumers. The case involved around 250 thousand vehicles in the United States.
Deutsche Boerse (DB1.DE) announced that new DAX membership rules will be introduced on August 21. New set of rules will allow for a quick removal of companies, outside of a regular quarterly rebalancing scheme. German stock exchange operator said that new rules will apply to Wirecard (WDI.DE) and the company will be removed from the index.
All DAX members are pulling back as sentiment deteriorates on Chinese data. Source: Bloomberg
