Trade talk optimism and improved German pmi data lift Dax

Fiona Cincotta
By :  ,  Senior Market Analyst
Trade talk optimism and stronger eurozone data boosted global stocks on Wednesday. 

Hopes that the US and China were close to agreeing a trade deal after ironing out the majority of outstanding issues, put fresh legs on the recent rally. The Dax is particularly sensitive to trade talk developments, given that the index is mainly formed of exporters.

Meanwhile a slew of better than expected pmi data from Italy and particularly Germany, plus eurozone retail sales surprising to the upside, eased concerns over the outlook for the region. 

German service sector pmi unexpectedly increased in March to 55.4 up from 54.9 the month previous. This is some welcomed good news for Germany following disappointing manufacturing stats on Monday.

The yield on the German 10 year bond climbed above 0 for the first time in a week. The Dax surged over 1.2%, extending gains for a fifth straight session.

The Dax continues to move in an upward trend. A significant move above the key level of 12000 could indicate a breakout of the Dax’s current upward trending channel. Beyond this the next target will be 12100 before 12300. Any pullback we consider a buying opportunity. It would take a move below 11300 for a bearish stance to be revived.

Related tags: Germany 40

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