DAX continues to stabilise as deceptive calm returns in the Middle East

The mere absence of fresh negative headlines from the Middle East is helping to stabilise financial markets. The rise in oil prices is losing momentum, meaning investors’ worst-case scenario of another surge above $100 a barrel has, for now, failed to materialise. Further support comes from better-than-expected economic data from China, pointing to stronger private consumption and renewed resilience in the labour market.

This is particularly important for the German economy, given its significant exposure to economic developments in China. By contrast, Broadcom’s quarterly results, released after the US market close yesterday, failed to convince investors, with the shares trading slightly lower in early European trading.

Today’s session in Frankfurt is likely to be dominated by a series of purchasing managers’ indices and producer price data from both Europe and the United States. The DAX could continue to stabilise over the course of the session. From a technical perspective, the index is expected to trade within a range of 25,800 to 26,050 points today.