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Glancing at today’s European economic data releases, it is hard to gain too much optimism as all the major targets for manufacturing and services appear to have been missed. The Germany 30 has suffered as much as most on the back of this and at one point trading was off by over 100 points.
Before European trading started today the latest HSBC Chinese manufacturing figures showed that, once again, the Chinese economy is in growth. After five months of contraction and showing a 3% swing in the last two months, this would normally have been enough to encourage markets higher; however, instead first France then Germany and the eurozone all posted disappointing data contributing to a pan-European selloff.
Over the weekend events in Iraq took a turn for the worse, with the government struggling to hang onto control of the country. ISIS troops have managed to gain control of border points with both Jordan and Syria. The subsequent squeeze on oil to over $115 a barrel is further compounding difficult manufacturing times for Germany.
The technical picture for the DAX is still positive, with the 50-, 100- and 200-day moving averages still some way from being broken and the longer-term trend remaining strong. The short-term trend still points towards the index drifting to around 9800 before possibly making a fresh effort to hurdle the 10,000.