Slowing Virus Lifts Stocks
Stocks jump as coronavirus cases and deaths slow in mainland Europe
Share this:
Asian markers traded on the front foot overnight and European markets jump higher on the open, whilst safe havens come under pressure as the market mood turns positive.
Both Italy and Spain have reported a substantial slowdown in the number of new coronavirus cases and deaths. France and Germany’s curves are also showing signs of flattening. Italy is even considering how to come out of lock down. This is a significant change in situation to where we were just two weeks ago.
The number of cases in Germany has reached 95,391 according to the Robert Koch Institute (RKI) with a total of 1,434 deaths. The number of new cases rose by 3,677 compared with Sunday’s 5936.
Whilst there is now light at the end of the coronavirus tunnel, the data showing the economic impact of the restrictive measures taken to protect the public is still only at its initial stages. The full extent of the blow will take some time to seep through the economy.
German Factory Orders Beat Expectations
German factory orders fell by less than forecast also supporting risk sentiment. Factory orders dropped -1.4% month on month in February, versus the -1.9% forecast and the 5.5% print a month earlier. The data will get worse over the coming months before it gets better, but today’s reading is a sign of relief for investors, particularly as the coronavirus outbreak shows signs of easing.
German factory orders fell by less than forecast also supporting risk sentiment. Factory orders dropped -1.4% month on month in February, versus the -1.9% forecast and the 5.5% print a month earlier. The data will get worse over the coming months before it gets better, but today’s reading is a sign of relief for investors, particularly as the coronavirus outbreak shows signs of easing.
Levels to watch
The DAX has jumped 4% on the open, at 9920. It trades above its 50 and 100 sma on the 4 hour chart, a positive sign. Although it remains with the horizontal channel that it has traded within since 25th March. A break above the upper bound of 10144 is needed for more bulls to jump in. Meanwhile a move below the lower bound of 9328 is needed for another step lower.
Immediate resistance can be seen at 10144, prior to 10645 (200 sma) and 10766 (high 11th March).
On the flip side, support can be seen at 9700 (100 sma) prior to 9328 (channel’s lower bound).
Asian markers traded on the front foot overnight and European markets jump higher on the open, whilst safe havens come under pressure as the market mood turns positive.
Both Italy and Spain have reported a substantial slowdown in the number of new coronavirus cases and deaths. France and Germany’s curves are also showing signs of flattening. Italy is even considering how to come out of lock down. This is a significant change in situation to where we were just two weeks ago.
The number of cases in Germany has reached 95,391 according to the Robert Koch Institute (RKI) with a total of 1,434 deaths. The number of new cases rose by 3,677 compared with Sunday’s 5936.
Whilst there is now light at the end of the coronavirus tunnel, the data showing the economic impact of the restrictive measures taken to protect the public is still only at its initial stages. The full extent of the blow will take some time to seep through the economy.
German Factory Orders Beat Expectations
German factory orders fell by less than forecast also supporting risk sentiment. Factory orders dropped -1.4% month on month in February, versus the -1.9% forecast and the 5.5% print a month earlier. The data will get worse over the coming months before it gets better, but today’s reading is a sign of relief for investors, particularly as the coronavirus outbreak shows signs of easing.
German factory orders fell by less than forecast also supporting risk sentiment. Factory orders dropped -1.4% month on month in February, versus the -1.9% forecast and the 5.5% print a month earlier. The data will get worse over the coming months before it gets better, but today’s reading is a sign of relief for investors, particularly as the coronavirus outbreak shows signs of easing.
Levels to watch
The DAX has jumped 4% on the open, at 9920. It trades above its 50 and 100 sma on the 4 hour chart, a positive sign. Although it remains with the horizontal channel that it has traded within since 25th March. A break above the upper bound of 10144 is needed for more bulls to jump in. Meanwhile a move below the lower bound of 9328 is needed for another step lower.
Immediate resistance can be seen at 10144, prior to 10645 (200 sma) and 10766 (high 11th March).
On the flip side, support can be seen at 9700 (100 sma) prior to 9328 (channel’s lower bound).
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Oil Shock Hits Bond Yields and Squeezes the Consumer
U.S. 10-year and 30-year bond yields have moved higher as markets reopen after the Labor Day weekend, with the producer price index and the consumer price index landing within days of each other. The European Central Bank decision sits between them, where the economic projections and Christine Lagarde's press conference carry more market risk than the rate move itself. The DAX has also broken below its 21-day exponential moving average, a sign that momentum beneath a resilient index is starting to fade.
DAX, Crude oil forecast: Rising energy prices, yields threaten risk assets
Following a weak handover from Asia, European markets and US indices were under pressure this morning, as rising oil prices and elevated bond yields once again weighed on risk appetite. Among the major European indices, the German DAX will be in firm focus this week, with the ECB’s rate decision coming up on Thursday. That decision is likely to be a hike, as rising oil prices threaten to re-accelerate inflation.
German DAX Records Meet a Treasury Market Under Strain
The German DAX record high is back in reach after four straight higher sessions, helped by cheaper energy and resilient eurozone data.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.