• Major European indices have begun the day lower even as politics took a back seat
  • DAX (DE30 on xStation5) remains little changed after a weaker session on Monday
  • Deutsche Boerse (DB1.DE) feels pressure as some investors call on the company to dismiss its CEO

While political risks have been broadly set aside, geopolitics has taken control over risk sentiment. As a result, the European indices ended the Monday’s session lower as North Korean foreign minister claimed that the weekend’s tweet of US President Donald Trump was a clear declaration of war. It was a response to the last week’s threat of the US President who suggested the Kim Jong-Un’s regime could have been totally destroyed.

link do file download linkTrading on the DE30 has been quite dull of late, even the fallout of the German election has failed to bring about higher volatility. Source: xStation5

A technical landscape of the German index has been quite boring lately, and that scenario hasn’t been changed in the aftermath of the general election. The price is still walking a tightrope between two crucial levels – 12670 points and 12520 points. If the price manages to break above the former level, it could be a signal of a resumption of gains. On the other hand, a possible breakout of 12520 points might be a sign of a return of declines.

Let’s also smoothly move to the FX front. Namely, the EURUSD is on the back foot in early trading which is decisively propping up the DE30. However, the under-performance of the single currency is unlikely to be a protracted effect of the German election, it’s probably a side-effect of the US dollar strength which is the strongest currency in the G10 basket.

link do file download linkThe German DE30 is slightly lower in early trading. Henkel (HEN3.DE) and Merck (MRK.DE) are among top movers. Source: Bloomberg

There were no more significant swings across the Asian equity markets despite a harsh communique coming from North Korea’s foreign minister. The Hang Seng (HKComp) was able to add 0.6% to its valuation, the Shanghai Composite (CHNComp) closed higher 0.05%, the S&P/ASX 200 declined 0.2% while the NIKKEI (JAP225) slid 0.3%. The weaker performance of the Japanese stock exchange could have stemmed from the stronger JPY.

In Europe, indecision dominates as all major indices are hanging around the break-even line. The FTSE100 (UK100) is trading 0.2% lower, however it has tended to be an outlier compared to its European peers of late. Let’s also add that the SP500 future (US500) is pointing to a weaker beginning as for now after quite a dismal session on Monday where the NASDAQ (US100) led the losses and edged down as much as 0.9%.

Company news

Deutsche Boerse (DB1.DE) is among the worst performing stocks today as it feels mounting pressure on CEO from some investors. They demand a resignation of the company’s CEO Kengeter in order to bring an end to an insider trading inquiry that has dogged the stock-exchange operator for months.

Henkel (HEN3.DE) is also losing its appeal as the stock has been downgraded from outperform to market perform by Raymond James. The spot price is the lowest for almost a month after the call.