DE40: Bullish sentiment continues as China Signals Possible Trade Talks

• RWE AG received a positive assessment from Redburn, which initiated coverage with a "Buy" recommendation and a price target of €42

• Deutsche Bank saw Citi raise its price target to €22.30 from €20.80 while maintaining a "Neutral" rating on the shares.

• BASF SEshares fell after the German chemicals firm stated that uncertainty caused by U.S. trade tactics prevents it from making reliable predictions for its business this year.

• Airbus SE announced it won't cover the cost of tariffs on its planes imported by U.S. airlines

European markets are showing mixed performance with a positive bias. The volatility gauge VSTOXX declined -2.55% to 21.03, while Spain's SPA35 rose 0.99% to 13402.

Several markets recorded gains, with Poland's W20 leading (+1.47% to 2762.6), followed by Austria's AUT20 (+1.18% to 4015). The Netherlands' NED25 gained 1.15% to 886.50, and the UK's UK100 rose 1.06% to 8556.5. France's FRA40 increased 1.00% to 7632.9, Spain's SPA35 advanced 0.99% to 13402, Italy's ITA40 climbed 0.94% to 37506, and the EU50 rose 0.94% to 5176.6. Germany's DE40 gained 0.91% to 22930.3, and Switzerland's SUI20 advanced 0.42% to 12144.

The only decliner among European indices was the VSTOXX, which fell -2.55% to 21.03, indicating lower expected market volatility.

Dax Returns by Sector. Source: Bloomberg Financial LP

Volatility is currently observed in the broader European market. Source: xStation

The German DE40 Index is maintaining its bullish momentum, trading above the 23.6% Fibonacci retracement level and the 50-day SMA. Bulls will aim to hold above the 23.6% level, while bears will attempt to push the price below it, targeting the 50-day SMA. The RSI continues to show bullish divergence with higher lows, while the MACD is widening following a bullish crossover.Source: xStation

Market News

• RWE AG (RWE.DE) received a positive assessment from Redburn, which initiated coverage with a "Buy" recommendation and a price target of €42, implying a potential 26% upside from the last closing price. This comes as the company has completely halted its U.S. offshore activities, according to CEO Markus Krebber's upcoming AGM speech. Despite the pause in U.S. offshore development, Krebber noted that RWE's "business in onshore wind, solar energy and battery storage has so far been developing very dynamically" in the U.S. market.

• Deutsche Bank (DBK.DE) saw Citi raise its price target to €22.30 from €20.80 while maintaining a "Neutral" rating on the shares. However, the bank has been surpassed by BNP Paribas as the top underwriter of European bonds, as deal values fell 3.4% year-to-date compared to the same period last year. According to Bloomberg League Tables data, issuers sold €1.06 trillion of bonds through April versus €1.1 trillion a year ago. BNP Paribas climbed one spot from the previous month, with its market share rising 0.53 percentage points to 6.44% of the total. Palladium Global Investments SA was April's biggest issuer, with €27.7 billion in bonds.

• BASF SE (BAS.DE) shares fell as much as 2.6% after the German chemicals firm stated that uncertainty caused by U.S. trade tactics prevents it from making reliable predictions for its business this year. Despite this cautious outlook, the company reported first-quarter adjusted EBITDA of €2.63 billion, down 3.2% year-over-year but slightly above the estimate of €2.61 billion. BASF maintained its full-year guidance for adjusted EBITDA of €8.00 billion to €8.40 billion. Jefferies maintained a "Buy" rating, though noting the industrial solutions and agricultural divisions performed below their estimates. Citi, with a "Neutral" stance, commented that while earnings held up better than initially feared, there remains "sizable earnings risk" from tariffs affecting both volumes and margins.

• Airbus SE (AIR.DE) announced it won't cover the cost of tariffs on its planes imported by U.S. airlines, potentially setting up a clash with carriers unwilling to shoulder the additional charges imposed by President Trump. CEO Guillaume Faury stated on a conference call that while Airbus is responsible for duties on supplies imported to its Alabama assembly plant, tariffs on aircraft exported from Europe to the U.S. are the customers' responsibility. The company is exploring alternatives with airlines that have international operations, including routing aircraft through other countries before delivery to the U.S. Despite these challenges, Airbus reiterated its target to deliver about 820 commercial aircraft this year, though noted deliveries will be backloaded due to specific supply chain challenges. The company reported Q1 adjusted earnings before interest and tax of €624 million on revenue of €13.54 billion, with net income of €793 million exceeding analyst estimates.

Other news coming from individual DAX index companies. Source: Bloomberg Financial LP