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DAX futures: German benchmark set for lacklustre open

We examine where IG Markets data suggests the Germany 30 index will open on Thursday, 16 April.

The DAX recent price action in focus

Pessimism looks to have returned.

German markets fell on Wednesday as investors dumped risk assets across the board. Specifically, the German DAX finished out yesterday’s session at the 10,279 point level – down approximately 3.90% for the day.

On a more granular level, just one Germany 30 stock finished out the day in the green, with Vonovia trading up 0.73%. By comparison, Deutsche Bank (-9.29%), Infineon (-9.13%) and HeidelbergCement (-7.00%) were the worst performing equities from yesterday session.

Over the last five trading sessions the DAX has indeed leaned towards pessimism, dropping 184 points or 1.76% in that period.

Looking at these moves from a technical perspective, DailyFx analyst Peter Hanks, said:

‘The DAX 30 moved lower in Wednesday trading alongside a broader decline in many risk assets. Despite recent losses, the DAX is considerably off its March lows and price action has been largely constructive.’

Mr Hanks concludes that as a consequence of this:

‘The German equity index has been able to reclaim a string of technical levels that it can now look to use as support should bearishness persist.’

Heading into Thursday’s session, at the time of writing, IG Markets data suggests that the DAX will open just 12.5 points or 0.17% higher.

Global market moves in focus

Other key European benchmarks fell on Wednesday, with the French CAC, Italian FTSE MIB and Swiss SMI all recorded losses. The Italian index was the worst performer here, dropping almost 5% to finish out the day at the 16,719 point level.

Further afield, US markets also struggled, with the Dow Jones Industrial Average, the S&P500 and the NASDAQ Composite all finishing out the day in the red.

This broad market weakness looks to have been driven by the release of weak economic data – with US retail sales data and New York manufacturing data declining precipitously.

Dramatically, and as CNBC yesterday reported:

'Manufacturing in the New York area also slumped by its biggest margin ever to a historic low, surpassing the levels seem in the throes of the Great recession. The Empire State Manufacturing Index hit -78.2, blowing past the prior worst reading the index had seen of -34.3 during the financial crisis.'

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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. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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