Asian stocks rallied today as investors reacted to the strong manufacturing PMI data from around the world. In China, the data showed that the PMI rose to 53.1 in August, while in the US, the PMI rose to 56.0, according to data by ISM. As a result, these numbers imply that the global economy is making strong progress even as the number of coronavirus cases continues to rise. In Asia, the Nikkei 225 index is up by 0.45% while the Shanghai composite and China A50 rose by 0.10% and 0.26%. The Hang Seng index also rose by 0.10%.
In the United States, futures tied to the Dow Jones, S&P 500, and Nasdaq 100 are also in the green following the impressive data from the United States. The three indices are up by 0.40%, 0.45%, and 0.70%, respectively. This increase is also because of the impressive earnings by several companies in the US.
For example, in a report yesterday, Zoom Communications, the video calling company announced that its revenue jumped sharply in the second quarter. That led its stock to jump by more than 40%. Later today, the three indices will react to the ADP employment data from the US.
Meanwhile, after falling sharply yesterday, the US dollar index has made an impressive recovery. The index, which gauges the dollar’s performance against key currencies, has risen by more than 0.10% today. That is because the US dollar has risen against the Swiss franc by 0.25% and by 0.10% against the Japanese yen. It has also risen against the Swedish krona, euro, and sterling.
Europe is also in the green. Futures tied to the DAX index, FTSE 100, and CAC 40 have risen by 0.36%, 0.78%, and 0.54%. Broadly, this increase is partly because of the weakness of the pound and the euro in overnight trading. Investors are also optimistic about a coronavirus vaccine, which could be unveiled in the next few months.
The daily chart shows that the DAX index is trading at €13,052. The price is above the 50-day and 100 simple moving averages. Also, it is forming an ascending triangle pattern, with the resistance being at €13,290. Therefore, since this pattern seems to be nearing the tip, there is a possibility that the index will continue moving upwards. If it does, the next resistance level to watch is €13,100. On the flip side, a move below the intersection of the ascending line and August 21st low of €12,628 will invalidate this thesis.
