dax stock price

Blue rectangles- lower highs Black lines- Fibonacci retracements Green lines- expected size of decline Red line- neckline resistance In previous posts in August and mid September we warned traders that it would be a bad month for bulls as price was getting rejected at key resistance levels and was forming lower highs. This week price made new lower lows relative to the double bottom of March and July. The weekly candlestick has broken below the 50% Fibonacci retracement and the double bottom at 12,400-12,450 area. Our target since August remains at the 61.8% retracement around 11,300. Weekly trend remains bearish as price continues making lower lows and lower highs. As long as price is below 13,600 we remain bearish.   Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295036

At the close of the New York Stock Exchange, the Dow Jones fell 1.71% to hit a 52-week low, the S&P 500 fell 1.51% and the NASDAQ Composite fell 1.51%. Shares of UnitedHealth Group Incorporated were among the leaders of gains among the components of the Dow Jones index today, which lost 3.79 points (0.74%) to close at 505.04. Walgreens Boots Alliance Inc fell 0.15 points or 0.48% to close at 31.40. Dow Inc shed 0.23 points or 0.52% to close at 43.93. The drop leaders were Nike Inc shares, which lost 12.21 points or 12.81% to end the session at 83.12. Boeing Co was up 3.39% or 4.25 points to close at 121.08, while Walt Disney Company was down 3.20% or 3.12 points to close at 94. 33. Leading gainers among the S&P 500 index components in today's trading were Charles River Laboratories, which rose 3.57% to hit 196.80, Weyerhaeuser Company, which gained 2.92% to close at 28.56, and shares of Twitter Inc, which rose 2.74% to end the session at 43.91. The losers were shares of Carnival Corporation, which fell 23.31% to close at 7.03. Shares of Norwegian Cruise Line Holdings Ltd lost 18.11% to end the session at 11.35. Quotes of Royal Caribbean Cruises Ltd decreased in price by 13.14% to 37.91. Leading gainers among the components of the NASDAQ Composite in today's trading were FingerMotion Inc, which rose 82.16% to hit 3.37, SAITECH Global Corp, which gained 43.36% to close at 3.24, and shares of Avenue Therapeutics Inc, which rose 39.03% to end the session at 10.08. The biggest losers were Atlis Motor Vehicles Inc, which shed 39.91% to close at 20.40. Shares of Aterian Inc lost 37.06% and ended the session at 1.24. Quotes of Edesa Biotech Inc decreased in price by 34.66% to 0.92. On the New York Stock Exchange, the number of securities that fell in price (1,758) exceeded the number of those that closed in positive territory (1,354), while quotations of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,139 companies fell in price, 1,583 rose, and 228 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.69% to 31.62. Gold futures for December delivery added 0.11%, or 1.80, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.87%, or 1.52, to $79.71 a barrel. Futures for Brent crude for December delivery fell 2.13%, or 1.86, to $85.32 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.08% to 0.98, while USD/JPY advanced 0.23% to hit 144.77. Futures on the USD index fell 0.09% to 112.10. Relevance up to 05:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295131

October 2022 seems to have brought respite to many asset classes. During this time, the stock, bond or cryptocurrency markets tried to pick up, while the US dollar seemed to lose value at the same time, along with the falling VIX "fear index" contract. Performance of key indices and companies In October,one of the popular futures contracts, the contract for the U.S. Dow Jones Industrial Average index saw the biggest gains. It rose by almost 13 percent during this period. Although the month is not yet over, for the moment, only Verizon ranks in the entire index since the beginning of October with a negative result. On a monthly basis, the decline is 0.92 percent. In contrast, the biggest increase in the index was achieved by Caterpillar (up more than 30 percent). The company reported that sales and revenues in the third quarter of 2022 recorded an annual increase of 21 percent, reaching $15 billion. The company's profit was $2.04 billion, an increase of 43.13 percent compared to the same quarter of the previous year, BBN reported. Operating profit rose 45.73 percent year-on-year to $2.42 billion. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel engines, industrial gas turbines and diesel-electric locomotives. Source: Conotoxia MT5, Caterpillar, Monthly DAX also with growth in October The second popular instrument, which seemed to rebound from earlier declines, was the contract for the German DAX index. Although emerging macroeconomic forecasts for the German economy appear to be worsening, and the European Central Bank raised interest rates, the DAX rose nearly 10 percent. The company that may have gained the most was Deutsche Bank, as the month's performance was up more than 30 percent by now. The German bank reported its best results since 2016 in October. Net income for the third quarter of 2022 was €6.9 billion, up 15 percent year-on-year and the highest third-quarter income since 2016. The dollar exchange rate fell nearly 1 percent. Market hopes that the U.S. Fed will slow down interest rate hikes at the end of the year and in the first quarter of 2023 may have led the U.S. dollar to fall in October. At the moment, the USD index is trading 0.9 percent lower than at the beginning of the month at 111 points. The EUR/USD exchange rate is near parity at 1.0000, all likely in anticipation of the Fed's November 2 interest rate decision. The market seems to be expecting a 75bp hike to 3.75-4.00 percent, while the end of the hike cycle could be priced in at 4.75-5.00 percent in early 2023. October's biggest declines? It seems that among the popular contracts, the biggest drop in October may be the VIX, which fell 15 percent to 26.86 points this morning. Looking at the chart of the contract showing expected volatility on the S&P500 index, someone could  see that this month's trading may have turned around at a potential resistance level. Source: Conotoxia MT5, VIX, Weekly Will volatility continue at lower levels in November? Here, a lot may depend on the US central bank and events in Eastern Europe. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Summary:  DAX, AEX and CAC40 seems to be heavy testing key supports. BEL20 still holding up. FTSE 100 could seems strong and could test all-time highs. FTSE 250 in falling channel but indicators point to bullish break out. But will it? DAX got rejected at the previous support at 14,149 last week (now a resistance level) and seems set for lower levels. Strong support at around 13,564 is likely to be tested withing the next week or so.However, RSI hasn’t yet broken below 40 threshold i.e., still showing positive sentiment. If DAX manages to close above 14,160 we would be likely to see a move towards 14,500 possibly also December highs.Look out for a move below last weeks lows 13,791. If that occurs RSI is likely to break below 40 supporting the bearish trend.   All charts and data : Saxo Group AEX25 is in a bearish trend after closing below 715 last week. Bouncing from around the 0.382 selling seems to be picking up. RSI still above 40 however, but a close below is likely to fuel further selling. A close below 690 on AEX will confirm the bearish outlook with no strong support until around 661-654.For AEX to reverse the bearish picture a close above 715 is needed.   BEL20 seems indecisive. The index broke support at 3,670 only to jump back above but has so far failed to resume uptrend by breaking above 3,777 which is needed for further upside.If BEL20 closes back below support at 3,670 followed by new low below 3,631 BEL20 is likely to experience a sell off down to 3,569 possibly 3,497.RSI indicator is still showing positive sentiment but there is divergence indicating the uptrend has weakened. CAC40 bounced from 55 daily SMA last week but is in a bear trend supported by negative RSI. RSI closed below 40 16th December. The support at around 6,363 could prove not be that strong if tested. If that scenario plays out a sell off down to around 6,200 should be expected. For CAC40 to reverse to uptrend a close above 6,615 is needed. Read next: Leading Used Tesla Prices Fall Faster Than The Market| FXMAG.COM FTSE 100 bounced strongly from 7,300 after breaking support at 7,423. FTSE seems likely to resume uptrend. RSI is not showing divergence and if RSI closes back above 40 it could be a good indicator FTSE 100 will test previous highs at around 7,600 potentially take it out for at move to all-time highs at 7,687.However, a possible scenario is that FTSE 100 could be caught in a range between 7,300 and 7,578. Break out is needed for direction. FTSE 250 is in a downtrend and seems for trade in a falling channel pattern. Support at 18,493 seems to hold for now. If FTSE250 breaks above its show term falling trendline a move to November highs at around 19,615 could be seen.No divergence on RS and still showing positive sentiment indicates we could see a bullish breakout of the falling channel.However, a close below 18,422 is likely to push the Index to next support at around 17,822. RSI divergence explained: When  price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend Source: Technical Update - DAX, AEX25, BEL20, CAC40, FTSE100 & FTSE250 | Saxo Group (home.saxo)

The good news with China’s reopening is that it should boost global growth. China and Covid The bad news with China’s reopening is that it will not only boost global growth, but also energy and commodity prices - hence inflation, the interest rate hikes from central banks and potentially the global Covid cases – which could then give birth to a new, and a dangerous Covid variant, which would, in return, bring the restrictive Covid measures back on the table, and hammer growth. Note that the reasoning stops here right now, the risky markets are painted in the red, but we could eventually go one step further and say that if the Chinese reopening hits the global health situation – hence the economy badly, the central banks could become softer on their rate hike strategies. But no one is cheery enough to see silver lining anywhere. This year really needs to end, now!   European and US markets So, Wednesday was marked by further selloff across European and US markets. The S&P500 slid 1.20% and Nasdaq lost another 1.32%. The DAX struggles to keep its head above the 50-DMA, but the FTSE 100 index is about to close the year with slight gains! Why? Also Turkish BIST 100 shot up to 188% at some point this year, making investors wonder whether Turkish stocks good performance could last and what happens if the lira dropped. Watch the full episode to find out more! 0:00 Intro 0:34 China reopening starts worrying 2:33 Why FTSE 100 outperformed in 2022? 5:00 What made Turkey’s BIST 100 rally 188%? Could it last? 7:37 Chinese stocks could outperform next year Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FTSE #BIST #outperform #China #Covid #reopening #inflation #expectations #energy #mining #stocks #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      

Stocks rose, with U.S. futures showing gains on the first day of trading in 2023. The yen lost ground, while gold traded at its highest level in more than six months. Contracts on the S&P 500 rose, and European stocks rose after sluggish trading at a low Tuesday. Stocks in Hong Kong and mainland China rose after initial declines. European stock indices are growing more actively than American ones against the backdrop of a strengthening dollar: Investors start 2023 with subdued expectations after a sharp swing last year when global stocks lost 20% in value, the worst performance since the financial crisis. Bonds lost 16%, the biggest drop since at least 1990 for a single leading measure, as central banks raised interest rates to slow inflation. "We are starting the year in challenging financial conditions, with potential inflation momentum coming from China and more broadly this means we may need to approach the start of this calendar year with relative caution across the portfolio." – Marc Franklin, Senior Portfolio Manager at Manulife Investment Management. Relevance up to 11:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331369

Summary:  DAX and Euro Stoxx 50 testing key resistance levels. A close above is likely to push Indices higher 3-4% higher short-term DAX is testing resistance at 14,654. RSI is back above 60 indicating higher levels are likely. However, there is still divergence but if RSI closes above its falling trendline will indicate DAX is likely to move higher and test key resistance at 14,901.However, 14,901 is not a strong resistance and if DAX closes above December 20222 peak at 14,676 uptrend has been confirmed both short- and medium-term. 15K is a very psychological level so a close above will give the market the feeling that all crisis talk is over and we are back to the “good old days” of Bull Market. We will most likely see stories about DAX could make an all-time high. But reality can easily return. However, a move above 15K is in the cards and a 1.618 Fibonacci Projection at around 15,222 could be seen before weakness will spread across the market. For DAX to reverse this uptrend a close below 13,791 is needed. First indication of this scenario to play out could be a break back below 14,149   Source all charts and data: Saxo Group sa Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM   Euro Stoxx 50 is at the time of writing above key resistance at around 4,025. If closing above and if RSI is closing above its falling trendline further uptrend should be expected. 4,165 is 0.786 retracement of the entire down trend since 2021 peak. However, a move to 1.618 Fibo Projection of the December correction at around 4,200 seems likelyIF Euro Stoxx fails to close above 4,025 the Index is likely to slide lower. But it needs to close below 3,767 to reverse the uptrend.      Source: Technical Update - European Equities higher. DAX and Euro Stoxx 50 testing key resistance | Saxo Group (home.saxo)      

European stocks kick off the week on last week’s positive vibes, adding more gains to their best ever start to a year. Dax The DAX extended its advance above the 15000 mark, to the fresh highs since before the war in Ukraine started. French CAC40 And the French CAC40 took over the 7000 resistance and is only around 4% below the 2022 peak. European stock The recovery in European stocks is impressive, yet could it last? China On the data front, China grew 3%, well below the government’s 5.5% target last year, but the Q4 rebound was well above market expectations. Retail sales contracted significantly less than expected as well, while unemployment unexpectedly fell, giving signs that the end of Covid zero measures are feeding into the data. Forex In the FX, the US dollar was better bid yesterday, but price rallies could be good to sell, especially against oil and commodity currencies, that should extend rebound on Chinese reopening story. Watch the full episode to find out more! 0:00 Intro 0:16 Could European stocks extend rally? 2:14 Energy, commodities swing between recession fears & China reopening 4:36 Stay away from meme stocks 5:57 Bitcoin catches up with stocks, but downside risks prevail 7:07 China posts encouraging data 8:18 Selling USD against energy & commodity currencies? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #China #growth #recession #fear #WEF #Fed #ECB #expectations #USD #EUR #JPY #CAD #AUD #crude #oil #copper #DAX #CAC #rally #earnings #season #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

Yesterday saw another broadly positive session for European markets, with the FTSE100 once again underperforming, after UK inflation data showed itself to be much stickier than was anticipated, putting upward pressure on the pound in the process.   US markets initially started the day on the front foot until a double punch of weak data saw yields slide sharply on both the short and long end, prompting concerns that US economic activity was being impacted by the lagging effects of multiple rate hikes.   This concern about the economic outlook, along with announcements from the likes of Amazon and Microsoft about job losses, saw US markets roll over after European markets had closed, closing sharply lower, as once again the S&P500 failed above the 4,000 level.   Yesterday's weakness came as a result of concerns about the health of the US consumer. After a strong performance throughout most of 2022, consumer spending appears to have run out of steam with November and December retail sales declining 1% and 1.1% respectively. US PPI for December also saw a lower-than-expected rise of 6.2%, a sharp drop from the 7.4% seen in November.   The Fed Beige Book added little to the picture when it came to how the US economy is doing, apart from an acknowledgement that price pressures are starting to slow, however St. Louis Fed President James Bullard added to the uncertainty by insisting that the Fed needed to get rates above 5% sooner rather than later. This view conflicts with the prevailing market narrative of a 25bps hike next month, as concerns rise that the Fed could well be hiking into a potential recession.   These economic concerns also translated into crude oil prices which having hit their highest levels since the beginning of December early on the day, promptly reversed course to close the day sharply lower.   One thing in the favour of the US economy in the face of disappointing economic reports is a resilient labour market, with today's weekly jobless claims expected to see a modest rise from 205k to 214k.   We also have housing starts and building permits data for December, with the recent cold weather not expected to offer much hope of a respite here.   Last night's weaker US close looks set to translate into a lower European open.   The US dollar had a mixed day slipping to a marginal 8 month low against the euro before recovering, while against the Japanese yen we saw a 400-point range, after the Bank of Japan pushed back on market expectations of further measures to tweak its monetary policy settings around yield curve control.   Governor Kuroda went on to say that a further widening of the YCC band wasn't needed yet, as he looked to finesse the central banks messaging around its next policy move. The BoJ's biggest problem is that yesterday's events only delay the inevitable, with national CPI for December expected to reach a 42 year high of 4% later today.   With the Fed closer to the end of its rate hiking cycle, and the Bank of Japan yet to start its tightening regime, the line of least resistance for USD/JPY is likely to be a move towards 120 and possibly lower in the coming weeks.   EUR/USD – made a marginal new high of 1.0887 yesterday, before sliding back again, as the market struggles for direction. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110.   GBP/USD – ran out of steam just shy of the December peaks at 1.2440. Above 1.2450 could see a move towards 1.2600. We need to hold above the 1.2000 area for further gains to unfold or risk a return to 1.1830.   EUR/GBP – the failure at the 3-month highs at 0.8895 this week has seen a move below last week's low at 0.8770/80, with the risk we could see a move towards the 0.8720 area, and 50- and 100-day SMA. The next support below 0.8720 targets 0.8680.   USD/JPY – the failure to hold onto the gains above 130.00 yesterday suggests the prospect of further weakness and a move towards the 126.50 area which is the 50% retracement of the up move from 101.18 to the highs at 151.95. Below 126.50 targets the 120.60 area.   FTSE100 is expected to open 38 points lower at 7,792   DAX is expected to open 60 points lower at 15,121   CAC40 is expected to open 30 points lower at 7,081   Email: marketcomment@cmcmarkets.com   Follow CMC Markets on Twitter: @cmcmarkets   Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

After two weeks of strong gains, European markets gave back some of this year's early momentum with a modest pullback last week, with some suggesting that we may well have seen the peaks in the short term, in a manner similar to what we saw last year. US markets  US markets had an altogether more mixed week with the Dow seeing its worst week since early December while the Nasdaq 100 finished the week higher.   While there may be some logic in the argument that we may have seen the peaks in US markets, given how they have performed in the last few months, there is less of an argument when you look at markets in Europe, which look set to open higher later this morning..   Valuations in Europe are lower to begin with, and on an income/dividend basis much more compelling, compared to the US, with the FTSE100 and DAX both trading on forward dividend yields of 3.77% and 3.36% respectively.   Nonetheless financial markets appear to have a rising conviction that central banks are on the cusp of a significant pivot on monetary policy sometime later this year, a view that appears to be getting additional traction now that a number of Fed policymakers appear comfortable with the idea of another step down in the central banks rate hiking cycle to 25bps next week.   This view continues to be reflected in the US bond market, where yields continued to make fresh multi week lows, with the US 2 year closing lower for the third week in a row, as has the 10-year yield.   The performance of the US dollar was no less nuanced, posting a fresh 8-month low, as various European Central Bank officials continued to make more hawkish noises. The pound also held up well last week, closing higher for the 4th week in succession against the US dollar.   As we look ahead to a new week most of the attention is set to remain on the latest set of earnings reports, as investors look to decide whether the current strong run of gains can continue, and how much further central banks are prepared to go to get a handle on inflation.   Last week markets appeared to take some comfort from the fact that companies were focusing much more on maintaining their margins, and cutting costs, as well as jobs, amidst uncertainty over the global economic outlook.   This comfort appears to be predicated on an assumption that any economic slowdown will prompt a pause first and foremost in the central bank's rate hike plans, followed by some rapid rate cuts. Of course this assumes that these aforementioned central banks will be happy to start cutting rates when inflation is still well above target.   This seems highly unlikely, and while markets appear to have become conditioned to this sort of mindset since the financial crisis took rates sharply lower, it is by no means the given markets appear to think that it is.   Unemployment is still low, not only in US but in the UK and Europe as well, and having heard last week from the likes of Fed governor Lael Brainard, who is normally considered dovish, that inflation in her view still remains way too high, it is difficult to envisage a scenario where rate cuts this year are likely at this point.   ECB President Christine Lagarde was also at it, saying that inflation is still way too high and markets are underestimating the ECB's resolve to drive prices back towards their 2% inflation target. While the ECB did step down to a 50bps hike in December, there were a number on the governing council who wanted another 75bps hike.   When the ECB met last month, Lagarde more or less pre-committed the ECB to at least another 3 50bps rate hikes at the next 3 meetings, in a move that saw the euro push higher, but thus far has failed to see it follow through.   This would suggest that markets are unconvinced the ECB will be able to follow through on such guidance given the risks it might pose to the borrowing costs of the more highly indebted members of the euro area.   As we look ahead to a new week, the main focus will once again be on the US economy and this week's Q4 GDP numbers, as well as the December core PCE deflator inflation numbers, which are due on Thursday and Friday.     EUR/USD – still finding the air quite thin anywhere near to the 1.0900 area and support around the 1.0770/80 area. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110.   GBP/USD – ran out of steam just shy of the December peaks at 1.2440, last week, but closed near the highs of the week. Has managed to hold above the 1.2300 area for the last two days. Above 1.2450 could see a move towards 1.2600. We need to hold above the 1.2000 area for further gains to unfold or risk a return to 1.1830.   EUR/GBP – held above the 50- and 100-day SMA last week at the 0.8720 area, before squeezing back to the 0.8775/85 area. We need to see a move through 0.8800 to retarget the 3-month highs of earlier this month. The next support below 0.8720 targets 0.8680.   USD/JPY – last week's rebound from the 127.00 area has thus far struggled to maintain traction above the 130.20 area, although we did overshoot briefly to 131.60 after the BoJ decision. We need to see a move through the highs last week to open up 132.50. We currently have support at 128.30.     FTSE100 is expected to open 12 points higher at 7,782   DAX is expected to open 73 points higher at 15,106   CAC40 is expected to open 23 points higher at 7,019   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

US markets started the week very much on the front foot yesterday, with the S&P500 closing above the 4,000 level and the Nasdaq 100 leading the way higher with its second successive 2% daily gain.   The outperformance in tech appears to point to a growing conviction on the part of investors that the Fed will soon have to look at cutting rates before the end of the year, although to look at bond markets yesterday, yields also moved higher, as money flowed out of treasury markets.   With a lot of tech companies starting to announce job cuts, as well as other measures to rein in costs, and inflationary pressures showing further signs of easing, it would appear that US investors are starting to think in terms of the next move higher, despite concerns over lower profits   Given the uncertain economic backdrop this comes across as a bit of a leap of faith, and its also notable that while US markets have started to gain momentum in the past few days, European markets have started to lose some of their early year momentum.   While US markets surged higher yesterday it is notable that today's European market open is likely to be a much more tepid affair, suggesting perhaps that investors in Europe don't share the same enthusiasm about the economic outlook, despite the reopening of the Chinese economy, which may help to provide a demand boost.   This increase in optimism is likely to be reflected in today's flash PMI numbers for January, which have already seen a pickup in economic activity in the past few months due to the sharp declines in energy prices from the peaks in August and September.   In Germany manufacturing PMI fell to 45.1 in October, but has recovered since then, albeit is still very much in contraction territory. Services have seen a similar pattern, dropping to two-year lows of 45, before showing small signs of a recovery. We expect to see a further improvement in today's January numbers to 48 for manufacturing and 49.5 in services.     In France, we've seen a similar pattern in manufacturing, although services have been more resilient due to the energy price subsidies provided by the French government to cushion French households from the worst effects of higher prices. France manufacturing is expected to improve to 49.5 from 49.2, and services to 49.8 from 49.5.   In the UK, manufacturing has struggled over the past 3 months and looks set to continue to do so, while services have been slightly more resilient. As we head into 2023 the challenges for business will be whether we see new investment, and a pick-up in economic activity, after the rising pessimism seen at the end of last year. Manufacturing is expected to remain subdued at 45.5, while services could slip back from 49.9 to 49.5.   Public sector borrowing in December is expected to remain high on the back of rising debt interest and energy price support with expectations of a small fall from November's £22bn to £18bn.   US manufacturing and services are expected to remain weak at 46 and 45 respectively.      EUR/USD – a marginal new high at 1.0927 yesterday, before slipping back again. The main resistance remains at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – ran out of steam just below the 1.2450 area yesterday slipping back towards the 1.2320 area. Has managed to hold above the 1.2300 area for the last three days. Above 1.2450 could see a move towards 1.2600. A move below 1.2290 could see a move towards 1.2170.   EUR/GBP – slid back from the 0.8815 area but while above the 50- and 100-day SMA which acted as support last week the bias remains for a return to the recent highs at 0.8890. The next support below 0.8720 targets 0.8680.   USD/JPY – has squeezed back above the 130.20 area, with a move through 131.60 and last week's high potentially targeting a return to the 132.50 area in the short to medium term. Support currently at the 128.20 area as well as the lows last week at 127.20.     FTSE100 is expected to open 20 points higher at 7,804   DAX is expected to open 47 points higher at 15,150   CAC40 is expected to open 23 points higher at 7,055   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

European markets were somewhat of a mixed bag yesterday after the lates flash PMI numbers painted a patchy outlook for certain parts of the economy in the UK and Europe.   US markets also underwent a mixed finish with the Dow finishing higher and the Nasdaq 100 lower,  due to caution ahead of the release of key earnings announcements after the close last night, with the main focus on Microsoft's Q2 numbers being of particular interest. These saw the software giant record revenues of $52.7bn, which was slightly below expectations, with profits of $2.32c a share.   As expected, personal computing and gaming revenue was disappointing, falling short of forecasts at $14.24bn, however this was offset by strong cloud revenue of $27.1bn. Windows OEM revenue fell 39%, while Xbox content and services saw a decline of 12%. On guidance Microsoft was rather pessimistic suggesting that Azure growth would slow, and that new business was already becoming more difficult. Microsoft also said subscriptions were also likely to slow, and that revenues would remain flat in Q3.   Looking ahead to today's European session the pessimistic outlook to last night's earnings numbers looks set to see a slightly lower open.   With UK inflation seeing a step-down last week to 10.5%, it remains painfully high for a lot of people, and on the RPI measure is even higher. In December, the ONS took the decision to pull the release for PPI inflation due to problems with some of the calculations, with respect to diesel prices as well as the food prices calculation.  This is significant as PPI can act as a leading indicator as to what is coming down the line when it comes to inflationary, as well as disinflationary forces. Prior to the ONS pulling the numbers in December there had been evidence that factory gate prices had been falling sharply with the last recorded October numbers seeing a slowing in inflationary pressure from the peaks in the summer.   If we get a further sharp slowdown in the annual numbers, this ought to give confidence that the headline numbers will also see similar falls in the coming months. Annualised input numbers in October came in at 19.5%, down from 20.8%, while output prices for October came in at 17.2%. Monthly input price estimates for today's December numbers are for a decline of -0.8%.   With energy prices continuing to fall over the winter, we've started to see gradual improvements in economic activity across the euro area. This improvement has been reflected in the better-than-expected German manufacturing numbers yesterday and was also responsible for a better than forecast improvement in German IFO business sentiment in December to 88.3.   This trend is expected to continue in today's January numbers with another improvement to 90.3, with the current assessment also set to improve to 94.9, and expectations set to rise to 85.3, from 83.2.   It was back in October that the Bank of Canada set the cat amongst the pigeons when it raised rates by a less than expected 50bps to 3.75%, in a move that suggests that central banks were starting to wake up to the possibility that too aggressive rate rises could do more harm than good.   They then followed that with another 50bps rate rise in December, to 4.25%, as concern grew that raising rates too high could create problems in the housing market.   With today's decision coming a week before next week's Federal Reserve decision, a lot of people are looking at the Bank of Canada for a steer in terms of whether we could see a step down from the Fed. It is widely anticipated that the BoC will announce another step down to 25bps, after headline inflation fell back to 6.4% from 6.8% in December. Median core prices however have remained sticky, remaining at 5% in November and up at the highs of the year, which in turn may mean the Bank of Canada could decide to err towards 50bps.     EUR/USD – currently range trading between the highs this week at 1.0927, and wider resistance at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – continues to struggle below the 1.2450 area and slipped back to towards the 1.2250/60 area. Above 1.2450 could see a move towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – having found support above the 50- and 100-day SMA last week the bias remains for a return to the recent highs at 0.8900. The next support below 0.8720 targets 0.8680.   USD/JPY – found resistance just above 131.00 yesterday, before slipping back. A move through 131.60 and last week's high potentially targets a return to the 132.50 area in the short to medium term. Support currently at the 128.20 area as well as the lows last week at 127.20.    FTSE100 is expected to open 5 points higher at 7,762   DAX is expected to open 25 points lower at 15,067   CAC40 is expected to open 10 points lower at 7,040   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

European markets have struggled for direction this week, finishing the day modestly higher after two days of minor losses.   US markets on the other hand finished the day strongly higher, with the Nasdaq 100 leading the way higher on the belief, rightly or wrongly, that the US economy is heading for a soft landing whatever the Fed does next week.   Yesterday's Q4 GDP numbers showed the US economy expanded by 2.9%, while weekly jobless claims fell again to 186k from 192k the week before.   If there are any concerns that the US economy is on the brink of a recession it's certainly not being reflected in the economic data, which still looks solid, as we look towards next week's Federal Reserve rate meeting.   Today we get a look at the latest personal spending numbers for December, after seeing a sizeable slowdown in the November numbers to 0.1%, after a strong October showing of 0.9%.   If we get a similar weak reading today, and all the forecasts suggest we might, then that would suggest a rising caution amongst US consumers about how the economy is evolving as we head into 2023. We've already seen US banks setting aside hefty loan loss provisions in their most recent earnings numbers, a move which might suggest rising unease that consumers are becoming more frugal with their spending, or that a slowdown might result in credit losses.   Expectations are for December personal spending to decline by -0.1%, which seems somewhat conservative given that retail sales showed a decline of -1.1% a couple of weeks ago.   Whatever numbers we get today it seems almost certain that we will see the Federal Reserve raise rates by another 25bps next week, and judging by the rally in US stocks yesterday, the market has increasingly priced in that outcome instead of what might have been a 50bps move.   The big concern is what markets aren't pricing, and while the Bank of Canada earlier this week signalled a pause in its rate hiking cycle, that doesn't mean the Fed will follow a similar path, even though markets appear to be pricing exactly that sort of outcome.   While yesterday's GDP numbers increasingly appear to support the prospect of a soft landing, the labour market data also suggests that the Fed has the headroom to continue to be much more aggressive.   Today's PCE Core Deflator inflation data is expected to confirm another modest slowdown from 4.7% to 4.4%, and the lowest reading since October 2021. It would also support the case for a more modest 25bps next week, however as we get nearer to the end of the Fed's rate hiking cycle there is some divergence with respect to what might come next.   Judging by the bond market reaction which saw yields move higher there may be a realisation that rates are likely to remain higher for longer, while the strong close for stocks might suggest the market believes rate cuts might not be too far away.   That seems doubtful if last night's Tokyo CPI is any guide, after inflation there surged to a new 42 year high at 4.4%, well above expectations of 4%. This suggests that global inflation is likely to be stickier than markets are currently pricing.   We'll soon see who is right when Fed chair Powell speaks next week, but if markets think a pause is coming, they could be in for a bit of a wake-up call.   EUR/USD – another fairly tight range yesterday with resistance at 1.0927 and the highs this week, as well as wider resistance at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – made another attempt to move towards the 1.2450 resistance area yesterday, before slipping back. We need to see a move through the 1.2450 area to target further gains towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – the failure to make progress through the 0.8850 area has seen the euro slip back. Also have resistance at the previous highs at 0.8900. Still have support above the 50- and 100-day SMA which we saw last week at the 0.8720/30 area. Below 0.8720 targets 0.8680.   USD/JPY – needs to break through the 131.00 area to target a move back towards 132.60. While below the risk is for further declines towards the lows at 127.20. We have interim support at the 128.20 area initially.   FTSE100 is expected to open 13 points higher at 7,774   DAX is expected to open 44 points higher at 15,176   CAC40 is expected to open 3 points higher at 7,099   Email: marketcomment@cmcmarkets.com   Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

Having seen the Federal Reserve hike rates yesterday evening by 25bps and signal that they are far from done, equity markets reacted by rallying strongly with the Nasdaq 100 surging to its highest levels since early September.   For all of Fed chair Jay Powell's insistence that more rate hikes were coming, and that the Fed was not looking at cutting rates this year, his failure to push back emphatically on direct questions about market expectations of rate cuts this year, as well as the loosening of financial conditions has created an even greater divergence between market pricing on rates, and the Fed's expectations of how the economy is likely to evolve. To borrow a line from Cool Hand Luke, "what we've got here is a failure to communicate".    Long story short, the market thinks the inflation job is done, even if the Fed hasn't arrived at that conclusion yet. Consequently, this goes a long way to explaining why US markets closed strongly higher and yields and the US dollar plunged to 9-month lows, with the euro hitting 1.1000 for the first time since April last year. Last night's rally in the US looks set to translate into a higher European open as we now look towards the Bank of England and the European Central Bank to outline their messaging when it comes to the timeline of their own rate hiking cycle.   Starting with the Bank of England, the MPC is on the horns of a dilemma as the UK economy continues to struggle with double digit inflation, although the economy may well not be as bad as perhaps was thought at the end of last year, which could prompt a modest tweak to some of its economic forecasts.   The slide in energy prices in recent months has alleviated some of the pressure on wage packets, when it comes to petrol prices, however with food price inflation still at 16%, they will also be acutely aware that a weak pound will make headline inflation much sticker than it needs to be if they show any indication, they are going soft when it comes to hit its inflation target.   There will be the usual concerns about the impact on mortgage costs from another 50bps move but 5-year gilt yields have barely moved since the lows set back in November, although 2-year yields are higher.   Whatever we get today we are likely to see a split again, with the likes of Tenreyro and Dhingra likely to be the most averse to another hike given that they voted for no change in December.   The likes of Catherine Mann are likely to push for another 50bps, while the rest of the committee are expected to split between 25bps and 50bps, from the current 3.5%. If we do get 50bps will the Bank of England signal it is done, and signal a pause, or will they move by 25bps and signal there is more to come. With core prices looking sticky and wages rising at over 7% any procrastination on the MPC's part when it comes to forward guidance could well do more harm than good.   Whatever we get from the MPC today history has taught us it's unlikely to help the pound in the short term given the Bank of England's propensity to talk the pound lower whenever they meet. There is also the fact that the pound has been under pressure on the back of the belief that the Bank of England is much closer to the end of its rate hiking cycle than the ECB.     After the Bank of England, it is the turn of the European Central Bank and here there is little doubt that we will see another 50bps rate hike later today. It is what comes next that is likely to dominate the discourse today.   When the most recent ECB minutes were released, it became apparent that a raft of ECB governing council members wanted a much more aggressive approach, pushing for a 75bps move.   In the wake of the recent Davos Economic Forum ECB President Lagarde doubled down on her December messaging of multiple successive rate hikes, saying that inflation is still way too high, and markets are underestimating the ECB's resolve to drive prices back towards their 2% inflation target. This hawkish message is unlikely to be softened despite the recent fall in headline inflation to 8.5%, given core prices have remained steadfast at record highs of 5.2%.   When the ECB met in December, Lagarde more or less pre-committed the ECB to at least another 3 50bps rate hikes at the next 3 meetings, in a move that has seen the euro push higher and which has finally seen it break above the 1.1000 level, although that has mainly come about as a result of the market reaction to last night's Fed decision, rather than any intrinsic euro strength.   This would suggest that markets are still not convinced the ECB will be able to follow through on the number of hikes indicated given the risks it might pose to the borrowing costs of the more highly indebted members of the euro area.   EUR/USD – finally pushed through the 1.0930 area and the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. Yesterday's move through 1.0950 now opens up a move towards 1.1110. Support now comes in at 1.0920.   GBP/USD – the recent lows at 1.2260 remain a key support after another failure last week at the 1.2450 resistance area. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – edging back towards the recent highs just below the 0.8900 area. A move through these highs could trigger a move towards 0.9000. Key support remains at the 50- and 100-day SMA which we saw earlier this month at the 0.8720/30 area. Below 0.8720 targets 0.8680.   USD/JPY – slipped below trend line support at 129.00 from the recent lows at 127.20, raising the prospect of a retest of those lows, and potentially on towards 126.50. Resistance now at 129.30.   FTSE100 is expected to open 30 points higher at 7,791   DAX is expected to open 102 points higher at 15,282   CAC40 is expected to open 35 points higher at 7,112   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

S stocks had a wobbling trading session yesterday. The S&P500 tipped a toe below its 50-DMA yesterday, near 3980, then rebounded to close the session around 0.50% higher, above the 4000 psychological mark. Nasdaq 100 saw support into the 12000 psychological mark and gained almost 1% into the close. The 14% jump in Nvidia certainly helped improve the overall market mood, whereas the US economic data was mixed and was not supposed to pour water on the equity bears or improve sentiment regarding the Federal Reserve (Fed) hawks. The latest GDP update from the US revealed that the US economy expanded 2.7% in the Q4, instead of 2.9% penciled in by analyst. A softer economic growth could have been encouraging for easing inflation and softening the Fed's hand. BUT NO, because the GDP price index – another gauge of inflation which was released along with the GDP update, showed that inflation in the Q4 eased but eased much less than expected – as a perfect reflection of the CPI and PPI data released last week. The cocktail of slower-than-expected growth and higher-than-expected inflation is the worst possible outcome, and we could see the latter reflected in the corporate earnings. The S&P500 companies now all reported their results and earnings fell 1% in the latest quarter. At first glance, this is not a good number, but these earnings are compared to the blockbuster post-pandemic numbers, and despite a fall, they remain high. The question is, how far they will fall. It will depend on several factors, including how aggressive the Fed will continue tightening policy. How aggressive the Fed will continue tightening policy will depend on how sticky inflation is. We have one more important data point to watch before the week ends... and that's the US PCE index, the Fed's favourite gauge of inflation. Given the previous inflation data, we know that inflation has certainly eased, but not as much as expected. If there is not a big surprise, there should be no bloody market reaction to a slightly higher than expected PCE index. The S&P500 could close the week above the 50-DMA, and Nasdaq above its major 38.2% Fibonacci retracement. There is one more thing that probably helps equities hold their ground, and that's the easing US yields. I believe that the US yields have been easing since a couple of days due to the rising geopolitical tensions between the US and China – after China screamed loud and clear their support to Russia this week. These rising tensions certainly increase the safe haven flows to the US treasuries and interferes with the hawkish Fed pricing. As such, the US 2 and 10-year yields are softer compared to a peak earlier this week. European stocks up, euro down on record inflation!? The European stocks gained and the euro fell on Thursday, even though the latest inflation data from the eurozone revealed that the core inflation advanced to a record high. The rising inflation is normally a boost for the European Central Bank (ECB) hawks, who increase the bets that the ECB will raise the rates more forcefully. The latter should weigh on equity valuations and support the euro. But no. The contrary is happening because the major driving force of the market is the Fed and the dollar. So, the EURUSD fell as low as 1.0577 yesterday, while the European stocks were upbeat. The DAX index for example is now at pre-war levels, whereas the latest data is less than encouraging for the German economy. The European exports are recovering to the pre-pandemic levels, but the German exports are clearly lagging behind the zone's average. Spain and Italy are doing much better than their German peers. Why? Because the energy crisis has taken a toll on German manufacturing, whereas the post-pandemic reopening benefit Spanish and Italian tourism. As a result, the headline data is strong, but the underlying factors warn that the Eurozone growth is perhaps vulnerable. Sticky inflation and hawkish ECB are major risks to the actual European equity rally. 41-year high, Mr. Ueda! Speaking of inflation, the data released this morning showed that inflation in Japan rose to 4.3%, a 41-year high, and gave a rapid boost to the yen, sending the USDJPY down to the 134 mark. But we know that the Bank of Japan (BoJ), under the leadership of its new head Ueda, is not necessarily concerned about the rising inflation. The BoJ prefers keeping rates below zero, for now, and that should continue playing in favour of USDJPY bulls, at a time when the Fed members continue showing the world how serious they are in taming inflation.  

After such a positive start to the year, with two successive monthly gains, European markets have performed remarkably well against a backdrop of a sharp rise in interest rates. US markets on the other hand closed lower as well as giving up some of their January gains.   Year to date we've seen the DAX rise 10.3% and the FTSE100 add 5.7%, against a backdrop that has seen German and UK rates surge against a backdrop of stickier than expected inflationary pressure.   These gains have inevitably prompted speculation as to how sustainable they are, and for now the progress we've seen thus far does look steady and sustainable. Much will depend on how high rates eventually settle and in that there are many strands of opinion.   Markets are continuing to price in the prospect that rates will eventually fall back to a lower baseline, with very few investors willing to countenance the idea that rates are likely to remain high for some time to come, and even longer.   Much will depend on high sticky inflation is likely to be, and on current evidence there is little sign that it is slowing, which means we could see at least 2-3 more rate hikes in the coming months, and rates could stay at these levels through 2024 and into 2025.   Today's final manufacturing PMIs from Spain, Italy, France, Germany and the UK are set to point to a mixed outlook when it comes to economic activity, with manufacturing expected to show an improvement to 49 and 51 in Spain and Italy and declines to 47.5 and 46.3 in France and Germany respectively.   Yesterday inflation in France hit a record high of 7.2% in February, driven by increases in food and services prices, while in Spain it edged back up to 6.1%. While we've seen slowdowns in the price of energy which generally tends to help the manufacturing sector, there has been divergent reactions to the milder winter. Italy and Spain appear to be more resilient, however France and Germany appear to be heading in the wrong direction.   One part of that is higher inflation, with today's German CPI for February expected to only decline modestly to 9%, from 9.2%, however there is a risk of an upside surprise given yesterday's readings from Spain and France. The sticky inflation outlook is already shifting rate hike expectations for the ECB, and a possible 4% pause rate.   We also have more economic data from the UK, where consumers are being similarly squeezed by higher prices and some shortages.  UK manufacturing PMI is expected to be confirmed at 49.2, an increase from 47.   Mortgage approvals have also been in decline in the face of the slowing economy and falling house prices. At the end of last year approvals fell to their lowest levels since May 2020 at 35.6k and could see a modest pickup in January to 38.5k, however it is clear that higher rates are weighing on demand for mortgages, as well as property.   Net consumer credit has slowed from the levels we were seeing in the summer, falling to £500m at the end of last year. This could see a modest pickup to £800m in January.   Moving on to the US economy, we have ISM manufacturing which will tee us up nicely for the services report on Friday, which helped reinforce the hawkish tilt that we saw post January payrolls.   Manufacturing ISM is forecast to improve modestly to 48, still in contraction, along with prices paid which is currently disinflationary at 44.5. European markets look set to start the new month higher after Asia markets got a lift from the latest China manufacturing and services PMI numbers for February, which showed that manufacturing activity jumped to its highest level since 2012 at 52.6. Services also improved to 56.3, giving the China reopening story some added legs, after what has been a slow start since restrictions started to get eased back in December.   EUR/USD – looks to have posted a bullish day reversal off support at the 1.0530 area earlier this week. We need to push through the 1.0640 area to open up a move higher, and back towards the 50-day SMA at 1.0730. While below 1.0730, the bias remains for a test of the January lows at 1.0480/85. GBP/USD – retested the 50-day SMA at 1.2150 yesterday, and which needs to break to retarget the 1.2300 area. Support remains at the lows this week at the 200-day SMA at 1.1920/30. A break of 1.1900 retargets the 1.1830 area. EUR/GBP – slipped back from the 0.8830/40 area and has drifted down to the 100-day SMA at 0.8750. While below the 0.8830 we could see further declines towards the 0.8720 level. USD/JPY – ran into resistance at the 200-day SMA at 136.90/00. Interim support at 133.60, and below that at 132.60, and 50-day SMA.   FTSE100 is expected to open 20 points higher at 7,896 DAX is expected to open 37 points higher at 15,402 CAC40 is expected to open 5 points higher at 7,281 Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

Despite another week of rising yields, European markets still managed to finish last week higher over concern that various inflation measures are starting to tick back higher again, having been in decline over the last few months.   The German DAX had a particularly good week posting its highest daily and weekly close in over a year, as confidence over falling energy prices and a more resilient global economy as China's economy reopens helps to foster a slightly less negative outlook about growth prospects.     The FTSE100 found itself lagging weighed down by underperformance in some of its more defensive names.      US markets also managed to finish the week higher, breaking a losing streak that had lasted three weeks in a row. Both the S&P500 and Nasdaq 100 managed to rebound after finding support at their respective 200-day SMA's.   Friday's rebound came against a backdrop of a sharp decline in US 10-year yields which fell back from their highest level since November, above 4%. Friday's ISM services report showed little sign that the big rebound in the US economy in January was a one-off, with the headline number falling slightly to 55.1, from 55.2, with further gains in employment to 54, and new orders rising to 62.4.   Prices paid did slow, but still remained high at 65.4.   As a leading indicator for this week's delayed non-farm payrolls number for February, it's a further indication that the US labour market continues to remain very resilient, with ADP and job openings (JOLTS) data also likely to add insight.     As we look ahead to this week the main focus, apart from Wednesday's ADP, and Friday's payrolls report, will be on Fed chair Jay Powell's testimony to US lawmakers tomorrow and Wednesday where he is likely to be quizzed on how he sees the US economy in light of recent strong data, and what measures the Fed might feel inclined to take if the data continues to come in strong.   It's unlikely that he will give too many clues given how close to the next meeting we are, and the main takeaway is likely to be data dependence, however, don't be surprised if markets pore over every single nuance just so that they can reinforce their own particular mindset.   We do have two other important rate decisions this week, namely from the RBA tomorrow, and the Bank of Canada on Wednesday, where the central bank may have cause to rue their decision to signal a pause at their last meeting given the strength of recent economic data.   Over the weekend the Chinese government signalled that this year's GDP target would be 5%, which comes across as a little on the low side given that last year saw a 5.5% target under more difficult circumstances. It's also potentially disappointing when it comes to the prospects for global GDP as a more restrained China means less potential for demand.   The lower-than-expected target might also suggest that Chinese officials are less likely to push stimulus into the economy as it strives for stability over anything else.   It could also be an acknowledgment that recent protectionist measures have damaged confidence in China as an investment opportunity, and consequently, investors could well be more cautious over the next 12 months.   This less-than-ambitious target appears to be weighing on commodity prices with Asia markets broadly positive as we look ahead to the start of today's European session, and a positive start to the week.   EUR/USD – struggled to get above the 1.0700 area last week but has remained above the bullish reversal of last Monday at the 1.0530 area. We need to push through the 50-day SMA at 1.0730 to open up 1.0820. While below 1.0730, the bias remains for a test of the January lows at 1.0480/85. GBP/USD – last week saw us ping between the 1.1920 area and the 200-day SMA, and the 50-day SMA at 1.2150 which remains a key resistance area. A break of 1.1900 retargets the 1.1830 area, while a break of the 1.2150 area is needed to retarget the 1.2300 area. EUR/GBP – failed to push above trend line resistance at 0.8900 from the January peaks last week. Above 0.8900 targets the 0.8980 area. We need to push below support at the 0.8820/30 area to retarget the 0.8780 area. USD/JPY – the failure to push through the 200-day SMA at 136.90/00 last week has seen the US dollar slide back. Support comes in at the 135.20 area. We also have interim support at 133.60. A break above 137.00 could see a move to 138.20.   FTSE100 is expected to open 5 points higher at 7,952 DAX is expected to open 47 points higher at 15,625 CAC40 is expected to open 37 points higher at 7,385 Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

Summary:  DAX cancelling down trend build up. Uptrend could be extended.FTSE 100 and FTSE 250 range boundWith levels on GER40, UK100 and UK250MID Today's Saxo Market Call podcast.Today's Market Quick Take from the Saxo Strategy TeamDAX broke below lower rising trend line last week only for buyers to lift it back above cancelling the bearish break out. Testing February peak the Index is set for higher levels.RSI still showing divergence since January but is now back above 60 supporting the bullish move. If closing above 15,659 uptrend is confirmed and DAX is set for a push to all-time highs around 16,290. Minor resistance at 15,736.For DAX to turn bearish a close below 15,150 is needed Source all charts and data: Saxo Group The GER40 cfd is within a few cents of the February peak at 15,656. A close above will confirm uptrend has resumed despite divergence on RSI. An uptrend that will likely take GER40 to all-time high level around 16,298. Minor resistance at 15,738. For GER40 to turn bearish a close below 15,231 is needed. FTSE 100 is holding up above 7,850 support. A close below FTSE will confirm a down trend possible taking the Index down to around 7,708.Until that scenario plays out the uptrend is intact. However, RSI is showing divergence indicating a correction should be expected. UK100 cfd levels. Support at 7,848 and 7,700. Uptrend is intact until a break below 7,848. FTSE 250 still range bound between 19,574 - 19,938. A close below 19,574 i.e., the Neckline will confirm the Shoulder-Head-Shoulder pattern to unfold with potential down to 18,500. A close above the uptrend is likely to resume. Levels on UK250MID cfd RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend   Source: Technical Update - DAX, FTSE 100 & FTSE 250 | Saxo Group (home.saxo)