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The DAX is still struggling to cope with the 200-plus point fall that it suffered on 2 January, and today’s improving Sentix investor confidence has only nudged the index a few points higher.
The picture for Europe remains split, with the economic data and sentiment surveys showing that Germany is still on course for its targeted recovery. The problems of southern Europe are less clear cut than they were, with Spanish service purchasing managers index figures jumping to 54.2 – their highest levels since before the financial crisis in August 2007.
The next issue that is looming is France; although the central bank was optimistic with its projects towards the end of last year, this optimism has not been backed up by any of the country’s economic releases. Although Germany’s recovery looks to be well founded, France could turn out to be a millstone around its neck. The continuing divergence away from the longer-term support of the 100- and 200-day moving averages raises the question of over-exuberance in 2013.
Could disappointing unemployment figures on Tuesday or soft monthly factory orders on Wednesday be the catalyst needed for more of a corrective pull back?