DAX on Standby Ahead of US Consumer Price Index
The DAX attempted to initiate an upward movement in Asian trading today. However, this attempt quickly subsided as the Far Eastern markets currently do not present a confidence-inspiring picture. After strong gains on the Chinese mainland stock exchanges yesterday, they suffered a broad-based setback today. By 05:00 CET, the SZSE Component had lost 750 points or 6.44%. The China A 50 also dropped over 5%. The anticipated second stimulus package is still awaited and may be smaller than expected. The Hang Seng Index in Hong Kong is also causing significant volatility. After heavy losses yesterday, the Western-oriented index managed to recover slightly in the early hours. However, this trend quickly reversed, and the Hang Seng fell by 458 points or 2.21%. Trading was somewhat calmer in Japan. The Nikkei 225 had a quiet session, gaining 252 points or 0.61%.
In contrast, the DAX slipped slightly below its previous day's close of 19,066 points in the early morning hours. As expected, trading volumes were thin, so the trend is not really indicative of the upcoming trading day.
Commodities and Metals
Rumors of Palestinian efforts for a temporary ceasefire also led to significant corrections in the energy sector. WTI (Crude Oil) fell from around USD 77 to temporarily around USD 72.70 yesterday. As the market seeks confirmation for these assumptions, crude oil traded sideways in Asia at around USD 73.65. The glimmer of hope for a potential easing in the Middle East also led to the long-awaited continuation of gold consolidation. The ounce of gold fell in the afternoon to USD 2,604, almost testing the "big figure" at USD 2,600. In Singapore, the precious metal then stabilized again at USD 2,615, although further declines cannot be ruled out from a technical perspective.
DAX Today
We expect a slightly asserted start to trading for the DAX today. It is anticipated that few market participants will take significant positions ahead of tomorrow's US CPI data. Thus, the trading day is likely to be bridged similarly to yesterday. It is suspected that the DAX will oscillate in the range of 18,900 to 19,150 points today. No clear trading direction is discernible, although from a technical perspective, prices should initially move south. Later in the session, a recovery is expected as the market anticipates positive CPI data tomorrow.
All in all, both trading directions can be profitable today. We will likely position ourselves on the short side pre-market and switch to the long side as momentum fades.
Economic Calendar Today (Filtered):
CET
01:00 JPY Reuters Tankan Index (Oct)
01:30 AUD Westpac Consumer Confidence (Oct)
02:00 AUD RBA Member Kent Speaks
08:00 EUR Germany Trade Balance (Aug)
13:00 USD MBA Purchase Index
14:00 USD FOMC Member Bostic Speaks
16:00 USD Wholesale Inventories (MoM) (Aug)
16:00 USD Wholesale Sales (MoM) (Aug)
16:30 USD Crude Oil Inventories
16:30 USD Crude Oil Imports
20:00 USD FOMC Meeting Minutes
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