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The DAX is testing the 9500 mark today. German equities got off to a poor start this morning, in line with the rest of the eurozone, as European markets took their cues from the US last night. Dennis Lockhart of the Federal Reserve stated his support for additional tapering of the stimulus package yesterday, and his words still haunted Europe this morning.
German carmaker Volkswagen is off nearly 3% after Swiss-based investment bank UBS cut its rating from ‘neutral’ to ‘sell’. The semiconductor manufacturer Infineon Technologies is trading at 757 cents, down 1.6%, after Goldman Sachs lowered its rating from ‘buy’ to ‘neutral’ for the company.
On a more positive note, eurozone industrial production increased by 1.8% in November. Analysts were expecting an increase of only 1.6%, and in fact industrial production grew at the fastest rate since May 2010.
As Alastair McCaig noted, the European Central Bank bulletin on Thursday will provide us with a better picture of the region’s performance. If this update hints at loosening monetary policy, we could see equities move higher.