DAX quietly climbing higher

Having previously suffered vertigo above the 10,000 level, the DAX looks set to have another attempt at setting an all-time high.

Frankfurt business district
Source: Bloomberg

While today’s focus has understandably been on both the Monetary Policy Committee’s voting at the last interest rate decision meeting, and tonight’s Federal Open Market Committee statement, the Germany 30 has quietly made steady progress higher.

Tomorrow will see the start of the latest Eurogroup meeting in Brussels. It is possible the markets will hear further clarification on the European Central Bank’s thinking towards the strength of the euro and the overall state of the economic recovery, both of which could affect the Germany 30.

As yet, the implications of Russia switching off the taps to Ukraine over their debated unpaid bills has yet to fully spook the eurozone equity markets, although the ZEW figures from earlier in the week were particularly low. The same could be said for the US that is once again sending troops into Iraq rather than withdrawing them. Admittedly it is only 300, for the purpose of protecting the US embassy and US citizens, but the negative connotations of fully armed US troops going to Iraq remains.

All of the above notwithstanding, the DAX still looks to be an equity index that wants to climb higher. As my colleague Chris Beauchamp pointed out, some solid support is forming and the medium term points towards a fresh effort to hit higher highs.

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