Yellen spooks DAX

The German index is off 1% as global equity markets are rattled by Janet Yellen’s comments last night.

The DAX is trading at 9185, after last night’s update from Federal Reserve chair Janet Yellen. The Fed is no longer using the US unemployment rate as a benchmark for quantitative easing; instead it is going to use a broader range of indicators. Ms Yellen rattled investors by hinting that interest rates could rise sooner than investors initially thought, and this triggered the selloff in global equity markets.

Adding to Germany’s woes is the situation in Ukraine, the US and EU are in a deadlock with Russia over Crimea. There is a possibility the west will impose economic sanctions on Russia, which could lead to Moscow reducing the amount of natural gas it exports. If tensions between Russia and the west increase, we could see DAX trade lower.

The DAX is currently finding support at the 100-hour moving average of 9174. A move below this could send us on a path towards the 9100 level.

Germany 30 chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.