The DAX is trading at 9602, up 0.3%, after German unemployment fell to 6.7% but the consensus was for a rate of 6.8%. The decline in the German jobless rate helped the eurozone unemployment rate drop to 11.9%, and the drop in the jobless rate could be a sign that the loose monetary policy of the European Central Bank is finally trickling down to the economy.
The DAX is benefiting from the comments made by Janet Yellen, who stated that quantitative easing could remain in place for ‘some time’ as the US jobs market has ‘considerable slack’.
There is speculation that the second largest economy in the world will make a cash injection to make sure the credit lines between banks remain open. Some traders are anticipating an addition of liquidity from the People’s Bank of China.
Russia reduced the number of troops on the Ukraine border as tension eases in the region. We could see traders’ buying the DAX as Germany is heavily dependent on Russian gas. The sooner the situation ends the better for Germany.
The 50-hour moving average is providing support at the 9587 level. If the Crimea crisis is resolved without sanctions being imposed we could see the DAX head towards the pre-Ukraine standoff of the 9700’s.