Morning Call. Market Overview for 10.08.2016
10.08.2016
The Big Picture:
The Dax has succeeded, relatively effortlessly, in breaking 10500 level to the upside. The up move was supported by good data in Financial Sector. Münchner Rückversicherung quarterly earnings shone in particular, beating many analysts profit expectations twofold. The Financial Sector, which due to negative interest rates has been fairing badly solar this year, is starting to improve in relation to the DAX.. The DAX´s relative strength in relation to the MSCI World Index and S&P 500 has turned positive. This in turn, will lead to increased capital inflow into German Stocks. Large hedgefunds follow a strategy of being invested market neutral.
For example this could mean that they sell Nasdaq Futures and buy a similar amount in DAX Futures, leading to them being long and short ,so in total neutral.
The aim of doing this, is to profit on relative outperformance of the DAX.
In turn this can lead to a short squeeze in the underlying index, creating even more outperformance. This may well have been a factor in yesterday´s DAX up move.
Pre-Market direction of US Futures (07.00 CET)
The S&P is trading unchanged
DAX
The DAX is in an upward trend. Main resistance at 10,500 has been broken to the upside. Next resistance is seen at 10860. We expect a continuation of the upwards trend.
Euro / USD
The Euro is trading sideways in a large trend. Support is at 1,0822, resistance at 1,1429.
JPY / USD
The USD has turned positive against the Yen. Biggest support will be found at 100,31.
Gold
Gold is trending upwards. The next major resistance is at 1375.
WTI Oil
Oil is trading a technical bounce. The midterm downward trend is intact
Overnight
Wall Street wasn´t able to follow Europe´s positive lead. Levels remained relatively unchanged. Valiant Pharmaceuticals rose by 25%, the company having confirmed the profit forecast for the year. Stocks in Asia are trading positive this morning. Hong Kong trading at the highest level since November of last year, Housing Stocks having been sought most. The Euro and Yen are trading up against the Dollar. Gold is trading up and Oil is relatively unchanged
Today´s numbers (CET)
No important data expected
Company news :
DAX Quarterly Earnings: E.on
USA Quarterly Earnings: Ralph Laurent, amongst others
RoboForex Analytical Department
RoboForex Analytical Department
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.