DAX futures rise overnight ahead of flash CPI data for Europe
Updated
Futures markets for European and US indices are trading higher ahead of today’s open, although the moves are more likely to be repositioning as opposed to a bullish signal for equity markets as a whole.
Flash CPI data remains the key focus for euro traders today. Yesterday we saw that German CPI rose at the state and nationwide level, and Spain’s rose slightly following a contraction last month. Today we have inflation data from Italy ad the Eurozone. With talk of a 75bp hike warranted, any upside surprises today simply cements that view. The HIPC read for Europe is expected to rise by 0.1% m/m (0.1% previously), and to rise 9% y/y (8.9% previously). Core HICP is expected to rise 0.4% m/m (-0.2% previously) and rise 4.1% y/y (4% previously).
Of course, with expectations for a more aggressive hike path comes the calls for a deeper recession. So high inflation data today could end up weighing on already fragile equity markets and further supporting the euro.
The DAX formed a bearish Pinbar on the daily chart yesterday and is trading higher ahead of the cash market open. We can see on the 4-hour chart that prices remain beneath a bearish trendline, with a small bearish hammer marking a swing high before closing back below the weekly pivot point. Given there are several resistance levels overhead – including the weekly/monthly pivot points, 61.8% Fibonacci ratio and 50-bar eMA – today’s bias remains bearish beneath yesterday’s high and for an (eventual) move back towards the lows around 12,700.
Flash CPI data remains the key focus for euro traders today. Yesterday we saw that German CPI rose at the state and nationwide level, and Spain’s rose slightly following a contraction last month. Today we have inflation data from Italy ad the Eurozone. With talk of a 75bp hike warranted, any upside surprises today simply cements that view. The HIPC read for Europe is expected to rise by 0.1% m/m (0.1% previously), and to rise 9% y/y (8.9% previously). Core HICP is expected to rise 0.4% m/m (-0.2% previously) and rise 4.1% y/y (4% previously).
Of course, with expectations for a more aggressive hike path comes the calls for a deeper recession. So high inflation data today could end up weighing on already fragile equity markets and further supporting the euro.
The DAX formed a bearish Pinbar on the daily chart yesterday and is trading higher ahead of the cash market open. We can see on the 4-hour chart that prices remain beneath a bearish trendline, with a small bearish hammer marking a swing high before closing back below the weekly pivot point. Given there are several resistance levels overhead – including the weekly/monthly pivot points, 61.8% Fibonacci ratio and 50-bar eMA – today’s bias remains bearish beneath yesterday’s high and for an (eventual) move back towards the lows around 12,700.
Trade closed: target reached
This turned into a classic swing trade for bears, with prices continuing lower and reaching the 12,700 target in a relatively straight line.
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