The German DAX index closed at 15,230 on Wednesday, November 8, 2023, marking a 0.51% increase, driven by positive corporate earnings and easing inflation concerns. The rise was attributed to upbeat earnings reports from Continental AG (OTC:CTTAY), Deutsche Post (OTC:DPSGY), Siemens Healthineers, and Commerzbank (ETR:CBKG). However, Adidas (OTC:ADDYY) and online retailer Zalando SE experienced a slide.
Inflation in Germany softened to 3.8% from 4.5%, while Eurozone retail sales declined by 0.3%. This eased market fears of the European Central Bank (ECB) maintaining high rates amid concerns of a recession. ECB Chief Economist Philip Lane expressed concerns about inflation and projected it wouldn't return to the target of 2% until 2025.
On Thursday, November 9, 2023, investors are keenly awaiting the ECB Economic Bulletin for insights into the bank's perspective on the economy, inflation, and monetary policy amid a challenging macroeconomic environment and pressure on Euro area economies. Speeches from ECB President Christine Lagarde and Chief Economist Huw Pill are also expected to draw significant attention.
Further influencing market direction will be corporate earnings from Deutsche Telekom AG (ETR:DTEGn) Merck and Rheinmetall AG. The US labor market will also be under scrutiny with jobless claims for the week ending November 4 expected to rise slightly from 217k to 218k. A speech by Fed Chair Powell could potentially impact market sentiment and might signify the end of the Fed's rate hike cycle if labor market conditions have softened sufficiently.
In terms of technical indicators, the DAX is currently positioned below the 50-day and 200-day Exponential Moving Averages (EMAs), indicating bearish price signals. A break above the resistance level of 15,247 could support a move towards the 200-day EMA, while a drop below 15,000 might allow bears to target the 14,957 support level. The futures markets suggest a negative start to the Thursday session, with the DAX and the Nasdaq mini down by 19 and 16 points, respectively. The 14-day Relative Strength Index (RSI) reading of 55.04 suggests a possible DAX move through the 50-day EMA before entering overbought territory.
In other news, Siemens Energy AG saw a decline of 2.34%, reacting to updates on Siemens Ltd's sales.
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