Morning Call. Market Overview for 17.10.2016

The Big Picture

It´s that time again, on Thursday the ECB meets in Frankfurt. Since the Brexit at the end of July and the following rally, The DAX has been in a sideways trend. During their time, the DAX has seen volatility, with many factors giving negative pressure. Discussions about a rate rise in the USA, worries about lower growth out of China, the effect of the Brexit on the German economy and rumors of a reduction in the ECB´s bond buying program all putting on pressure. Despite all of these factors, the DAX has held up well. Investors at least expect more clarity from the ECB on Thursday, in regards to further action. Market participants expect the ECB will extend its bond-buying program beyond March 2017. Statistically, this could lead to the best 6-month period for the German stock market.

DAX

The DAX is in a sideways trend.  Resistance is at 10820, support at 10250.

Euro / USD

The Euro is in a large sideways trend against the Dollar. Support is at 1.0822, resistance at 1.1429.

USD / JPY

The USD is in an upward trend.

Gold

Gold is in a downward trend.

WTI Oil

WTI Oil is in an upward trend

Overnight:

The German stock market was able to bounce after three consecutive down days, gaining 1.6% on Friday. Many shorts were closed ahead of the weekend, additionally the strong USD gave the German market support. A weak Euro is of particular value to Germany, as an export nation. In addition, there is speculation of more expansive monetary steps by the ECB on Thursday. Largest gainers in the DAX were the utility companies RWE and E.ON, RWE gaining 4.26%. After announcing very good quarterly numbers on Friday, JP Morgan and Citicorp could not hold on to gains, JP Morgan even closing in negative territory. Asian equities open the week on a positive footing. The USD, Gold and WTI Oil are largely unchanged.

Economic Data:

• 14:30 USA: Empire State Manufacturing
• 16:00 USA: Industrial Production

Quarterly Results:

• USA: Bank of America, IBM, Netflix

RoboForex Analytical Department