European equities surprisingly opened higher following drops in Asian shares overnight where last week’s global risk-off sentiment continues. Bull traders managed to take control of European markets at the opening bell after China, EU’s second largest trading partner, published much-improved industrial production figures for May. However, this initial spike is likely to be short-lived with risk-off sentiment set to continue this week. The outlook remains concerning with the number of new daily coronavirus cases not improving and even worsening in several areas over the weekend and this will offset the recent reassuring macro data from China, the US and even Europe. While volumes get lower as we enter the summer season, volatility spikes are expected as investors brace for a short but busy week with speeches from central bankers and the US jobs report on Thursday, before Friday’s US Independence Day.
The DAX-30 Index currently is one of the eurozone’s most resilient performers today with the market trading well above 12,000pts. However, the technical configuration does not look reassuring as bull traders do not seem to be strong or numerous enough to take prices to new highs. A break-out below the zone between 11,945pts-12,000pts would pose a serious threat to the current mid-term bullish trend and would open the way to a deeper corrective move towards 11,755pts and 11,030pts by extension.
