DAX is one of the most popular indexes in the world. It is listed on Frankfurt Stock Exchange. Virtually every day there is very high volatility which gives many trading opportunities.
Session Summary 31.05.2017
Inflation in euro zone slightly slowed down (reading for May was 1.4% y/y vs 1.5% predictions). Also, core inflation was lower than forecast and amounted 0.9% y/y 1.0%. In April core inflation was 1.2%. Weaker inflation data may support advocates of looser monetary policy of ECB.
Ignazio Visco, a member of the Governing Council of the ECB and head of the Central Bank of Italy, said on Wednesday that accommodative monetary policy is necessary to achieve inflation target what means further buy-back of bonds and low interest rates. ECB’s inflation target is around 2% in the medium term. There are also opposing opinions that the forward guidance should be modified by removing the words indicating the possibility of further rate cuts, increasing the scale or extending the duration of the quantitative loosening program.
For now, market is more doveish due to ECB position, especially after weaker inflation data. DAX index gained 0.13% yesterday and jumped above 12600 points, which is a bullish sign and next level is historical maxima around 12800 points.
DAX index after opening of the futures market balances at pivot point level around 12640 pts. Keeping over it would allow market to move towards R1 resistance near 12700 points. In turn, descent below today’s minima around 12630 points will open way to 12600 points.
09:55 – PMI index for industry, fin. For Germany
10:00 – PMI Index for industry, fin. For the euro area
14:15 – ADP report from USA