- All major European equity markets have started the day higher awaiting Trump’s speech
- DAX (DE30 on xStation5) tries to break its relevant resistance
- Siemens (SIE.DE) marches higher on the back of a deal with Alstom
The European stock markets have begun the day higher following quite a hawkish speech delivered by J. Yellen and before an appearance of the US President Donald Trump on a long-awaited tax system overhaul. There is guesswork that Trump will sketch out a blueprint of a lowering of CIT from 35% to 20%, a reduction the number of tax brackets from seven to three and a cut of the top tax bracket from 39.6% to 35%. All of that proposals should be supportive of the US stock market. Notice, he is scheduled to speak at 8 pm BST.
From a technical point of view the German DE30 has marked a brisk opening as the price has already neared a significant resistance zone in the vicinity of 12670 points. All the same, buyers have to cope with an upper limit of a channel before a continuation of the ongoing upward move. If so, the price might eye 12850 points as its next notable line to strike.
On the flip side, having assumed that morning increases are being fueled by expectations before a speech of Donald Trump, one needs to remember that he has missed a few occasions to introduce a tax reform thus far, hence another debacle could be likely. That said, buying stocks basing solely on Trump-related fireworks could backfire if he disillusions once again. Thus, once the US indices withdraw from their current gains (futures), it could weigh on equity markets all around the world. Under such circumstances a return towards a lower limit of a channel on the DAX might be in the offing.
Getting back to the Asian session once could notice that moods were divided. Namely, the NIKKEI (JAP225) lost 0.3%, the Australian S&P/ASX 200 moved down 0.1% while the Chinese indices managed to close slightly above 0. To be precise, the Shanghai Composite (CHNComp) ticked up 0.05% and the Hang Seng Composite (HKComp) gained 0.55%.
In Europe, there is no an index which would lose in the morning trading. The DE30 is standing out the most gaining 0.55%, the CAC40 (FRA40) is moving up 0.3%, the EuroStoxx50 (EU50) is grinding higher 0.5% whereas the British FTSE100 (UK100) is going up 0.35%. It’s worth also mentioning that the Spanish IBEX (SPA35) is gaining as much as 0.8% as there is still uncertain if the Catalan independence referendum is to take place this weekend (Sunday).
Simenes (SIE.DE) is leading the gains within the DE30 on Wednesday as the company informed that it’ll supply 330 electric passenger train cars to Israel Railways. On top of that, Siemens and Alstom agreed to merge their rail businesses which will result in forging transportation giant aimed at countering competition from China.
Besides, shares of the most prominent lenders in Germany are on the rise as well partly on the back of resurgence of hopes for another rate increase across the pond this year. Deutsche Bank (DBK.DE) is upping 2%, while Commerzbank (CBK.DE) is moving higher 2.1% at the time of writing.