European Open: DAX considers its next breakout, US PPI in focus

Asian Indices:

Australia's ASX 200 index rose by 61.5 points (0.88%) and currently trades at 7,054.20
Hong Kong's Hang Seng index has risen by 348.47 points (1.78%) and currently trades at 19,959.31
China's A50 Index has risen by 186.31 points (1.39%) and currently trades at 13,577.86

UK and Europe:

UK's FTSE 100 futures are currently up 15 points (0.2%), the cash market is currently estimated to open at 7,522.11
Euro STOXX 50 futures are currently up 13 points (0.35%), the cash market is currently estimated to open at 3,762.35
Germany's DAX futures are currently up 64 points (0.47%), the cash market is currently estimated to open at 13,764.93

US Futures:

DJI futures are currently up 101 points (0.3%)
S&P 500 futures are currently up 54 points (0.4%)
Nasdaq 100 futures are currently up 12 points (0.29%)

Asian markets tracked Wall Street higher, with all major benchmarks across the region posting gains. The exception was the Nikkei as Japan’s market were closed to celebrate ‘mountain Day’. Ranges were very tight for currency pairs, most of which simply retraced slightly against yesterday’s moves. This means that the USD was the strongest major, but that’s not to say there is any strength behind these moves.

Gold is beneath yesterday’s low which confirms the bearish hammer om the daily chart. Given the hammer failed to close above $1800 then we suspect we’ve now entered a corrective phase over the near-term, but we’d consider bullish setups above $1770 should they present themselves in due course.

FTSE 350 – Market Internals:

FTSE 350: 4186.07 (0.25%) 10 August 2022

295 (84.29%) stocks advanced and 50 (14.29%) declined
9 stocks rose to a new 52-week high, 4 fell to new lows
38.86% of stocks closed above their 200-day average
91.14% of stocks closed above their 50-day average
21.71% of stocks closed above their 20-day average

Outperformers:

+ 13.59% - TP ICAP Group PLC (TCAPI.L)
+ 12.63% - Admiral Group PLC (ADML.L)
+ 12.21% - Aviva PLC (AV.L)

Underperformers:

·-8.06% - HALEON PLC (HLN.L)
·-5.52% - Drax Group PLC (DRX.L)
·-5.48% - GSK plc (GSK.L)

DAX Daily Chart:

A bullish engulfing candle has formed on the daily chart, which respected the 20/50-day eMA’s pivotal support level. We suspect yesterday low marks a swing low, which would be its third higher low since July. We would consider bullish setups within yesterday’s range should prices retrace today. A break above yesterday’s high assumes bullish continuation and brings the 14,000 resistance zone into focus – a break above which opens up a run for the 200-day eMA / 01,200 resistance zone.

DAX 30 trading guide>

Economic events up next (Times in BST)

There’s not much in the way of European macro data for traders today, so we need to wait until 12:00 BST for Mexican industrial output. Although the main event for the region is at 19:00 BST when the Mexican central bank is expected to raise rates by 75bp.

US data at 13:30 is also worth keeping an eye on. Jobless claims have been creeping higher in recent weeks, and is one of the worrying metrics that undermines the strong NFP prints of late. We’ve also seen job openings fall and layoffs rise, so another rise of jobless claims plays into a weaker employment market theme. And as we’re fresh on the back of soft inflation data, markets would love to see weaker producer prices today to further cement the potential of peak inflation having been seen.

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