Equity indices across the board are charging higher as rebounding US Treasury yields lift sentiment.
Whilst German manufacturing has been hit hard by slowing global demand, today we saw German consumer confidence unexpectedly declined heading towards April. This is particularly poignant as domestic demand will need to drive the German economy this year as exporters struggle with the slowing global economy, Brexit and the ongoing trade tensions.
Proxy for global growth
The Dax is a proxy for global demand. Whilst global growth concerns remain front and central to what is directing the markets, we can expect the Dax to underperform. When fears over global growth ease, the Dax is just as capable of outperforming.
Whilst the Dax is up 0.7% at the time of writing, there is a chance this is more of a dead cut bounce rather than anything more significant. We would be looking for a move above 11475 to break the trendline on the 15 minute chart and indicate a more positive bias. On the downside strong support can be seen at 11300.
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