DAX flat after IFO report

The Germany 30 is broadly unchanged as the German IFO business climate report drops in June.

Frankfurt stock exchange
Source: Bloomberg

The Germany 30 is trading at 9928 after the weaker-than-expected IFO number pushed the German equity benchmark towards the 9900 mark. The index has not recovered from the selloff in early trading when the market plunged from 10,000 to sub 9900 in quick succession.

The German inflation report on Friday will be the focus of the week, and the consensus is for an increase of 0.2% for the month of June. The cost of living in Germany is still increasing, and the European Central Bank is less likely to introduce additional monetary easing.

As Chris Beauchamp stated, the DAX is finding it difficult to maintain its upward trend and it is hanging on to the 9900 level. If the DAX continues to run out of steam it could target the 50-day moving average of 9797. However, if speculation that Mario Draghi will pursue quantitative easing continues, we could see the DAX target 9980.

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