Yesterday afternoon the big boredom at the market. And now? Overnight Continental issued a clear sales and profit warning (read the details here). Since Continental is an important supplier, the current weakness of the automotive industry can be seen here. This of course also puts pressure on the automotive shares in the Dax. Actually. But see there, Conti is quoting pre-market unchanged to yesterday evening, and other big stocks like VW are even slightly up. Quite astonishing!
Dax receives some help from the Euro
With a plus of 0.9% in the Nikkei and a tiny mini-plus in the Dow, the Dax is receiving a very slight tailwind, at least from these targets. However, the weak euro currently supports the Dax even more. Euro vs. US Dollar has currently fallen to 1.1190 (chart since June). You can see the current downward trend quite well. A weak Euro naturally helps the export-oriented Dax! We can currently see the loss in the euro as preparation for the ECB decision on Thursday at noon. At the same time, the Dollar has been strong since yesterday evening! (see Dollar Index) Thus, the highly probable further easing of monetary policy in the Eurozone is already priced into the EURUSD exchange rate in advance!
The pre-exchange Dax (chart since Friday morning) is currently trading 61 points higher than yesterday evening. The weak Euro (looking forward to the ECB) seems to overshadow the negative Conti sentiment. But wait and see whether the mood changes. Especially when Boris Johnson’s election as new Tory leader and prime minister will be announced during the course of the day.
Oil has been moving in a comatose sideways trend since Friday evening. Gold has also moved sideways around the $1,426 level since Friday evening. From yesterday evening at 10pm German time, however, the price of gold fell to 1,417 Dollars, which is due to the very current strength of the Dollar.
Outlook for today: The election result on the island (Boris Johnson new Tory boss and Premier) is expected for noon German time. In addition, Texas Instruments and Snapchat (we will report), among others, will report tonight after market close in New York.