Dax Index
DAX index trades 0.50% higher at 13,349 as risk appetite has returned to markets after the U.S. and China have reached a phase one trade deal.
The USA has cancelled the additional tariffs on Chinese products while agreed on buying more agricultural products from the USA. Robert Lighthizer the trade representative said that a trade deal between China and U.S. was done and will double US exports to China over the next two years. China will cancel tariffs on U.S. products such as cars and other products following the trade deal.
The previous week ECB and Fed kept interest rates unchanged as expected by markets. Forecasts now suggest that the Fed will keep the current interest rates throughout 2020.
The Germany PMI Composite came in at 49.4 below expectations of 49.9 in December. The Services PMI came in at 52 in line with expectations while the Manufacturing PMI came in at 43.4, below market consensus of 44.5. Stronger data out of China also boosted investors sentiment. Retail sales increased 8% year-over-year in November above a 7.2% increase in the previous month and topping forecasts of 7.6% growth. Chinese Industrial output rose 6.2% on a yearly basis compared to 5% growth in October.
Asian indices ended mostly lower despite the positive opening, the Nikkei finished 0.29% lower at 23.952, the Hang Seng ended 0.65% higher at 27,508. Singapore Straits Times finished 0.25% lower at 3,206, while the Shangai benchmark was positive adding 0.56% at 2,984.
In Wall Street the stock futures trading slightly higher, the Dow Jones futures are 0.01% higher at 28,135; the S&P 500 is 0.01% higher at 3,168 while the Nasdaq is 0.20% higher at 8,734.
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Dax 30 index trades close to yearly highs although it gave up stronger early gains and as of writing approaches the daily lows. Dax index last week tested the 50-day moving average and managed to rebound hitting fresh yearly highs on positive headlines from the trade talks.
On the upside, Dax immediate resistance stands at 13,384 the daily top, and then at 13,429 the high from Friday’s session. A convincing break above will open the way for a visit to 13,596 the high from January 22nd.
On the other hand, the index will meet its first support at 13,338 today’s low. More bids might await at Friday’s low at 12,894. If the DAX index breaks below that level then the next support zone will be met at 12,140 the 100-day moving average.
After Friday’s sharp rebound the positive outlook has returned and an attempt to yearly highs looks possible.