Market News & Analysis

Top Story

Dax Steady Ahead Of Trade Talks

Hopes for a limited trade deal has sparked a modest bounce in stocks. The Dax has edged higher in early trade as investors look ahead to the 13th round of US - China trade talks starting in Washington today. Trading is relatively calm amid contrasting reports over how successful these talks will be.

On the one hand China is after a limited deal but in an ominous sign, could leave the talks a day earlier than originally planned. On the other hand, investors are digesting reports of a potential currency pact, no more tariffs and other agreements. Too good to be true?

Dax traders will be watching carefully to see if some form of deal can emerge from these negotiations given the impact that the ongoing dispute and slowing global trade is having on the German economy. 

German Exports Fall Fueling Recession Fears
German data has been dismal, with the manufacturing sector deep in contraction. Exports are also down 1.8% month on month in August, significantly worse that the 0.8% increase forecast and fuelling fears that the German economy slipped into recession this quarter.
As evidence mounts of the damage that the trade dispute is having on global trade and the German economy, Dax traders are likely to respond strongly to trade talk headlines. Trump won’t be impressed by a limited deal given his desire for a far-reaching agreement. However, the markets will consider it a vast improvement from the current uncertain picture.

Dax levels to watch:
The Dax rebounded overnight and is holding steady in early trade. A move above 12170 or below 12000 is needed for a stronger directional bias. 
A breakthrough support at 12000 could open the door to 11950, prior to 11880. On the upside resistance can be seen at 12170 opening the door to 12250 and 12320 beyond that. 


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.