Having logged gains on Monday as a result of better than expected Eurozone consumer price index (CPI) data, the European stock markets have stalled somewhat and are currently down for the day across the board.
From a session open at 9,708.50 the DAX initially reached weekly highs of 9720.66. The bullish momentum did not last however, with the German index turning sharply downward within half an hour of the open and declining 0.38% to where it currently sits at 9,662.60.
The decline comes in the face of better than expected GfK Consumer Confidence Survey data, which came out as 8.5 against a forecast of 8.2, suggesting there may be an overarching fundamental pressure on the European markets. This pressure may have arisen as a result of the speculation surrounding the Chinese government’s Yuan intervention.
The CAC40 mirrored the DAX’s opening session, logging weekly highs of 4420.94 within a half hour of the session open, before reversing and dropping half a percent to where it now sits at 4,391.87.
Finally, having opened the day at 6,834.09 the FTSE has dipped 0.47% to 6,797.84, just a few points above yesterday’s low at 6,790.93.
The Eurozone markets will likely consolidate ahead of a number of key data releases scheduled for tomorrow and Friday. The first of these—German unemployment change—comes at 08:55 GMT tomorrow, quickly followed by the German CPI at 13:00 GMT. On Friday, Eurostat will reveal the Eurozone CPI figure at 10:00 GMT. Each of these releases has the potential to move the European markets.
Both the DAX and the FTSE currently reside just shy of key resistance levels, 9,800 and 6,870 respectively. A better than expected release across the scheduled data would likely initiate a test of these resistance levels and, if the indexes can close above them, there might be further upside heading into March.
Having said this, a rise in unemployment in Germany, or a lower than expected decline, may put pressure on the markets to retest weekly lows.
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