Jump to content

DAX's historic gains amid eurozone's inflation easing


Recommended Posts

Dive into DAX's record-breaking run, fuelled by Eurozone inflation easing. Explore market dynamics, technical analysis, and potential risks.

 

original-size.webpSource: Bloomberg

 

 Tony Sycamore | Market Analyst, Australia | Publication date: 

Last week marked a historic fifth consecutive gain for the DAX, echoing patterns not seen since October 2022.

The DAX’s gains last week were supported by a Eurozone inflation report, which showed inflation eased to 2.4% in November, its lowest level since July 2021. Core inflation fell to 3.6% in November from 4.2% in October. With disinflation in Europe playing out much like in the US, it's no surprise that the European interest rate curve is pricing in five 25bp ECB rate cuts by the end of 2024.

The UK rates market isn’t quite as excited about BoE rate cuts. Although headline inflation has fallen from 10.7% to 4.6% last month, core inflation at 5.7% is still too high. This explains why the UK rates market is pricing in just two and a half BoE rate cuts in 2024.

The contrasting inflation and interest rate outlook between the Eurozone and the UK helps to explain why the DAX gained 9.41% in November while the FTSE gained only 1.8% during the same time.

FTSE daily chart

 

Source: TradingView

DAX technical analysis

Like its US counterpart, the S&P 500, the DAX has gotten very close, but thus far, failed to break above its year-to-date highs.

As viewed on the RSI, the DAX is at extremely overbought levels, and while we remain bullish into year-end, we would not contemplate opening fresh longs at these levels. Instead, we would prefer to use dips back towards support at 16,100/16,000, looking for the DAX to retest and break above the 16,615 July high in the weeks ahead.

Aware that a sustained break below the support of the 200-day moving average at 15782 would warn that the rally has run its course and that a deeper pullback is underway.

DAX daily chart

 

original-size.webpSource: TradingView

  • Source Tradingview. The figures stated are as of 5 December 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.

 

 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Imagine a world where tokens are not just static assets but dynamic entities with executable scripts, thanks to ERC-5169 and TokenScript brought to life by the ingenious minds at Smart Layer. These technologies empower tokens to carry out intricate logic and front-end interactions, opening doors to endless possibilities. Trusted by over 1200 developers and 30 major brands, Smart Layer isn't just a concept; it's a proven solution embraced by industry leaders for its ability to tackle integration, privacy, and trust head-on. It's more than just a suite of technologies; it's a catalyst for the tokenized web revolution. At its core, Smart Layer introduces a paradigm shift, ushering in a trustless environment where token logic reigns supreme. Smart Tokens, the building blocks of this new era, encapsulate business logic in a blockchain-based format, enabling seamless interactions across systems and tokens. Tokenization becomes the linchpin of this transformative journey, as goods, services, and digital rights morph into programmable tokens. This not only streamlines integration but also fosters frictionless markets and empowers users in the digital realm.  As we look ahead to the next generation of the web, Smart Layer stands tall as the integration bus, connecting disparate systems and enabling limitless possibilities. It's not just about decentralized execution; it's about scalability, security, and a decentralized future where interactions are complex yet seamless. In this narrative of innovation, the Smart Layer isn't just a piece of the puzzle; it's the cornerstone of the Internet's future, a programmable service network facilitating decentralized interactions and shaping the digital landscape for generations to come. Am completely immersed with the ideology that this amazing innovation will reign supreme in this evolving industry and the tokens holders will have every reason to celebrate in the nearest future. Do you guys share the same sentiment or you think it's another over hyped project.
    • Blockchain technology has proven effective in various sectors where its use has been employed, and now businesses want to utilize its intelligence to raise user experiences and productivity. Sadly though, two major hurdles stand in their way: complex integrations, and data sharing regulations. Where tokenization promises to proffer solutions, scale and functionality limitations have halted its breakthrough; enter Smart Layer. Smart Layer promises us a new way to deliver business services that will unlock the next era of digital experiences. While current token functionality is limited by smart contracts, Smart Layer new token standard (EIP-5169) enables tokens to become Smart, and go beyond assets to deliver composable business services, thereby resolving the issue of extending token functionality. Through Smart Layer model, Web2 businesses are bound to build seamless user experiences by delivering more portable and composable services through tokenization, evading the need to build complex integrations with multiple chains. Smart Layer simply captures value with every integration and issued token, as businesses easily tokenize their experiences and services, and paves the way for seamless transition of businesses from web2 to web3. Smart Layer runs as a token-incentivised network of service nodes powered by Smart Layer token ($SLN), a token that has gained global attention thanks to its vast utilities and huge airdrop. Leading exchanges such as Bitget has also indicated interest in listing $SLN when the liquidity threshold is met. Your thoughts on this exciting project?
    • As blockchain technology and cryptocurrency adoption continues to surge, a lot of newbies seems to get discouraged due to the complexities involved in navigating through this evolving industry hence the reason why devs are constantly looking for ways to bring innovation that could ease the understandings of people embracing this industry. Thankfully IQ came through with a brilliant innovation where blockchain and cryptocurrency knowledge thrive. There, you'll find a wealth of wikis covering everything you need to know about the crypto world. It's not just an encyclopedia; it's a tool to empower you and shape the future of blockchain. Interestingly they don't rely solely on human effort. Their partnership with artificial intelligence, including OpenAI's GPT-4, helps scale content and make it more accessible. They're all about sharing knowledge in an easy, intuitive way. At the heart of their ecosystem is IQ.wiki, a hub for the curious, the seekers, and the scholars of blockchain. It's not just a source of information; it's a community united in the quest for understanding and growth. And powering it all is the IQ token, a symbol of commitment to a smarter future. More than just a cryptocurrency, it bridges the gap between artificial intelligence and blockchain, driving towards decentralization and empowerment. With a staggering 1173% up from the previous ATL, the tokens continues to get attention of both traders and investors alike and with many more CEXs now listing it on their platform, I think this AI token could follow the pattern of other top AI projects like TAO and AGIX or even surpass them. What are your thoughts
×
×
  • Create New...
us