DE30: UBS reversal lifts stock market sentiment

• Old Continent bounces back after tough start to day, UBS covers entire early day declines

• Wall Street reacts to Credit Suisse takeover

• Russia acquires part of Volkswagen assets

UBS negates the entire declines from the start of the day. Source: xStation5

The first trading session in Europe this week was all about reacting to the weekend takeover of Credit Suisse by UBS. Although the initial trading was conducted in a rather pessimistic mood, the second part of the session brings a clear rebound. Investors' attention is primarily focused on Wall Street reacting to the takeover and the uncertainty surrounding the redemption of Credit Suisse's risky bonds, which had previously caused market panic. A speech by President Lagarde is awaited at 15:00. PPI inflation in Germany came in above expectations, nevertheless down on the last reading.

The mood in Europe improved during this week's first trading session, although the start of trading was clearly dominated by the supply side. Source: xStation 5

• Investors' attention today is primarily focused on the banking sector, which is reacting to the takeover of Credit Suisse by UBS. In the background, uncertainty is created by the confusion surrounding the AT1 bond redemption. More information can be found here. German and other European bank quotes are recovering from early session losses. 

AT1 bonds for Europe's largest banks. Source: Bloomberg

• A Russian court has frozen the assets of Volkswagen (VW.DE) in Russia in the face of a lawsuit with GAZ, Reuters reported. The company has been trying for nearly a year to sell off its business in Russia, in particular its plant in the city of Kaluga, where production lines allow it to create nearly 225,000 vehicles a year. The company's shares are currently trading down nearly 1%. 

• Furthermore, Volkswagen-owned Skoda will have to lay off nearly 3,000 employees and discontinue production of certain car models if the EU's Euro 7 emissions law is adopted in its current form. 

DE30 chart

The German DE30 is recovering dynamically from the early part of the day and is now back to the opening levels of today's session. Source: xStation 5