• European stock markets have kicked off the day unimpressed with North Korean geopolitical risks
  • DAX (DE30 on xStation5 platform) still hovers below its local resistance line
  • RWE (RWE.DE) trades lower as the stock has been downgraded

Investors across the old continent seem to be literally intact despite the overnight’s North Korean missile ballistic launch. There is nothing new that the regime of Kim Jong Un tries to show off throughout parading its nuclear weapons. Having said that, there were almost no market reactions, neither on gold, safe haven currencies nor bonds. In effect, the European equity markets have started marginally higher and the DE30 appears to still have a chance to try to break its resistance line.

link do file download linkThe DE30 has been closed within an ascending triangle formation. Source: xStation5

Looking at the hourly chart one could say that the price has been closed within an ascending triangle formation. The DE30 has striven to break 12560 points three times but each try has failed thus far. Furthermore, the price seems to be still supported by an upwards trend line which has acted in favor of bulls so far. That said, if buyers are capable of lifting the price above 12560 points, a move towards 12640 points might be on the cards.

On the other side, a bearish scenario should be considered as well. Whipping through the macroeconomic calendar one could notice that the US retail sales report might significantly affect the greenback. Having regard to quite a close relationship between the German index and the EURUSD one could assume that better figures from across the pond may hasten declines on the main currency pair which, in turn, are expected to translate into upward moves on the DE30. Under such circumstances, a breakout of a support line (a blue one) could be likely to occur.

link do file download linkThe details show that as much as 16 stocks are trading below the flat line. Source: Bloomberg

The Asian stock markets brought some drops however they were no heavy at all. The Australian S&P/ASX 200 (AUS200) was the worst one and lost 0.75%. Besides, the Shanghai Composite (CHNComp) gave back 0.5%, the Hang Seng (HKComp) moved lower 0.3%. In turn, the NIKKEI (JAP225) turned out to be the strongest being buoyed by the feebler JPY performance which is another sign of indifference to the nuclear test carried out by North Korea.

In Europe, there has been the benign beginning of the session. The DE30 is trading marginally lower 0.05%, the CAC40 (FRA40) is unchanged, the EuroStoxx50 (EU50) is edging down 0.1% whereas the British FTSE100 (UK100) is again the worst one dropping 0.4%. Let’s also add the US futures point to a subtly bearish opening.

Company news

RWE (RWE.DE) is losing a bit more than 0.5% which could be a ramification of the call from Societe Generale. The French bank marked down the stock from buy to hold and moved down the price target from 22.4 EUR to 21.6 EUR while the spot is currently at 20.20 EUR.

On the other side of the spectrum, there is Deutsche Bourse (DB1.DE) which is increasing 0.6% despite the latest report. Namely, the company has to pay $12.5 million in fines to resolve an inquiry by German authorities into possible insider trading before its talks to merge with the London Stock Exchange became public.